Danish Central Bank Expects Economy to Grow by 3.3%

Denmark's reopening schedule is having the effect of returning economic activity "close to pre-pandemic levels" and "a mild boom" should be expected in coming years, the Danmarks Nationalbank said.

According to the central bank statement, the Danish Gross Domestic Product (GDP) is expected to rise by 3.3 per cent in 2021, and by 3.7 per cent and 2.2 per cent in 2022 and 2023 respectively, media reported.

As many restrictions against Covid-19 have been eased, the overall activity is close to being back at the same level as before the pandemic, and the economy is supported by a strong recovery in private demand, said the statement.

"The growth for the rest of the year and next year is expected to be driven by private consumption, which is supported by large savings. In addition, there is a further increase in exports, which is prompted by a rapid recovery in the export markets," it noted.

However, central bank governor Lars Rohde also pointed out that there are "signs of bottlenecks" in industry and construction, calling for adjusting the extraordinary fiscal support to the economy.

"With the economy heading for a mild boom, the government should be prepared to tighten fiscal policy more than planned," said Rohde.