Denmark’s GDP to surge before notable drop

Denmark is projected to witness a GDP growth of around 3% this year and the next, with the pharmaceutical industry, particularly Novo Nordisk, driving half of this expansion. Economic minister Stephanie Lose is optimistic, attributing growth to the increased workforce participation of seniors, the youth, and a significant input from international labor, which has contributed 40% to Denmark’s growth since 2015. Despite the heavy reliance on a single company, the minister is not worried about economic stability. However, a downturn to 1.7% growth is expected by 2026 due to less labor market pressure. The slowdown will manifest in a delayed adjustment in labor demand due to weak productivity growth across several industries. Although households have experienced an increase in purchasing power and real income, consumer spending remains cautious amid inflation rates that are close to central bank targets.