25 September 2024
The Danish economy is in mild recovery, supported by global growth and Danes regaining purchasing power after a few years of high inflation. Employment has continued to rise, but because the labour force has also grown, no further pressure has been applied to the labour market over the past year. Pressure on the labour market has eased since 2022.
There is a good chance that wage increases will slow down over the next few years, due to less pressure on the labour market and significantly lower inflation than a few years ago. Inflation is expected to stabilise at around 2 per cent.
"Even though pressure on the labour market is easing slightly, we are still in a situation of very low unemployment. Consequently, monetary and fiscal policy combined should seek to avoid boosting activity. This may therefore not be a good time to relax fiscal policy to the extent proposed by the government for the 2025 budget," says Christian Kettel Thomsen, Governor of Danmarks Nationalbank.
In our latest projection, we expect inflation (HICP) in Denmark to be 1.3 per cent this year, 2.1 per cent next year and 1.8 in 2026. We expect GDP growth to be 2.1 per cent this year, 2.3 per cent in 2025 and 1.5 per cent in 2026.
Danmarks Nationalbank's new analyses of the Danish economy can be found on Danmarks Nationalbank's website, nationalbanken.dk.
Press enquiries can be directed to Communications and Press Officer Teis Hald Jensen by phone +45 3363 6066 or e-mail tehj@nationalbanken.dk.