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Danish economy going through recovery: official gov't survey

Xinhua, May 27, 2015 Adjust font size:

The Danish economy is at the beginning of a recovery after six consecutive quarters of growth and rising employment, an economic survey showed on Tuesday.

The growth is backed by lower oil prices and interest rates, while Danish competitiveness is strengthened by the lower effective exchange rate, according to the survey released by the Danish Ministry for Economic Affairs and the Interior.

According to the survey, the improvement is most evident in the labor market, where more than 38,000 people have been employed in the private sector since mid-2013 and the positive development is expected to continue.

"The recovery from the crisis has been long, but after one-and-a-half years of growth and rising employment it now appears that the economic recovery has taken hold," said Morten Oestergaard, Denmark's Minister for Economic Affairs and the Interior, in a statement.

He said the recovery is at an early stage and that initiatives are needed to ensure it is maintained.

The gross domestic product (GDP) growth is now forecast to be at 1.7 percent in 2015 and 2 percent in 2016, as against a December forecast of 1.5 percent and 2 percent, respectively, mainly due to growth in the private sector.

Supported by growth in the global economy, exports will remain a major driving force behind the Danish growth, according to the report.

The report said domestic demand is expected to be a major driving force behind the increasing growth over the forecast period, with rising private consumption and investment.

Steen Bocian, chief economist at Denmark's Danske Bank, believes that the recession is over.

"As we have had a consistent rise in employment figures and increasing house prices with high consumer confidence, I think we can confidently say that the recession is behind us," Bocian said.

He however warned of possible negative effects of the recovery, saying "we can very quickly get into a situation where there may be bottlenecks in terms of labor shortages, particularly in the construction industry and in technical professions such as engineers." Endit