The Danish economy recorded an annual growth rate of 2.6 percent in the initial three months. A strong upswing in private consumption and rising exports have been the key growth drivers. The solid growth is likely to continue in the years ahead.
On a quarter-on-quarter basis, Danish economy expanded 0.6 percent. This is seen in the revised current account data. Compared with the latest data, the first growth is unchanged, but the historical figures have been considerably revised upwards.
For the whole of 2016, the economic growth was upwardly revised to 1.7 percent from 1.3 percent. Consequently, the annual growth rate for the first quarter has now been upwardly revised to 2.6 percent from 2.2 percent. This signifies that the recovery of the Danish economy is even stronger than indicated by earlier numbers and that labor market trends and GDP figures are now better aligned.
The data released on Friday is good news for the Danish economy. The preliminary figures implied a contribution from inventories to GDP growth of 0.7 percentage point. The figures indicate that this contribution was actually 0.2 percentage point. Meanwhile, private consumption growth has been upwardly revised to 0.7 percent quarter-on-quarter, and the fall in investment has been downwardly revised to -2 percent.
“We expect the Danish economy to continue to grow at this healthy clip also in coming years and that Danish economic growth over this period will be above the long-term growth potential”, said Nordea Bank.
The positive view is based on households where a combination of rising purchasing power and huge wealth growth over recent years creates a solid foundation for higher consumption. Meanwhile, Danish firms will see rising demand from export markets that would add to increasing employment and investment activity.
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