In the first quarter of 2016, Denmark’s economy expanded 0.5% q/q, as compared with consensus forecast of a growth of 0.1%. Net exports, higher household consumption and construction activity positively contributed to the GDP, triggering a higher growth. Denmark’s economy is likely to remain on a higher growth path in the remainder of 2016.
Exports in Denmark grew 0.6% q/q in the first quarter. The growth in exports was driven by higher goods exports, whereas exports in service declined again. Meanwhile, import remained flat at 0.1%, bringing about a meaningful positive contribution from net export.
Household consumption, on the other hand carried on with its upward trend, growing 0.7% q/q in the first quarter of 2016. Household consumption has been growing by 2% over the last year and is the key driver of Denmark’s economic growth. Meanwhile, inventories were a drag on the economic growth, subtracting 0.3 percentage points.
The Danish economy, in the future, is likely to remain on the path of higher growth, said Nordea Bank in a research report. This is expected to be driven by higher private consumption. Private consumption is expected to be fuelled by lower interest rate, rising employment, higher house prices and positive growth in real wage. Meanwhile, a weaker trade-weighted DKK and higher global growth is likely to help export rebound. Overall, the Danish economy is likely to grow by about 1% this year, noted Nordea Bank.
