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The national debt has fallen sharply in recent years, figures from the National Bank show. (Archive photo) Photo: Kristian Djurhuus/Ritzau Scanpix

Denmark’s debt lowest in 47 years

Denmark’s state debt has decreased by 87 billion Danish kroner over the past year, now constituting just 9% of the Gross National Product (GNP), the lowest ratio since the end of 1977. The significant reduction is attributed to substantial public financial surpluses from high income taxes due to record employment levels, corporate taxes, and VAT. Senior economist Kristian Skriver of Dansk Erhverv highlights that these surpluses are the reason for the historic low debt. The low debt is also seen as a buffer for the Danish economy against future public expenditure challenges arising from low birth rates and an aging population. Significant investments in defense, climate, research, and education are anticipated, posing challenges in workforce procurement for these projects. The Finance Ministry predicts public finance deficits from 2028 for 19 years due to demographic trends.