Danish central bank expects continued economic upswing

Denmark's central bank on Wednesday maintained its expectation that the upswing in the Danish economy will continue in the coming years.

Growth in gross domestic product (GDP) is forecast at 1.8 percent in 2015 as against a June projection of 2 percent, while the figures for 2016 and 2017 remain unchanged at 2.1 percent and 1.8 percent respectively, according to a quarterly review by Danmark's Nationalbank.

Nationalbank explained that the forecast for 2015 is adjusted downwards slightly due to the development in the second quarter, noting that the overall growth outlook is unchanged, and the projection assumes that the upswing will pick up speed in the second half of the year.

It expects that the Danish economic growth will continue, with an annual increase in GDP of around 2 percent, as "rising exports and private consumption will be the key drivers of growth in the coming years."

Given that the Danish government's most recent forecast indicates that the state of the public finances is worse than anticipated, the central bank also recommended a tighter fiscal policy so that the structural budget is brought to balance.

"With the economic situation set to normalize in 2017, fiscal policy should be gradually adjusted from currently stimulating economic activity to having a neutral effect," Nationalbank said. Endit