Danish central bank lowers GDP growth forecast for 2016

Denmark's central bank lowered the country's economic growth expectation for 2016 by 0.5 percentage points on Wednesday.

Growth in gross domestic product (GDP) is expected at 1.3 percent in 2016, as against a previous forecast of 1.8 percent, Danmarks Nationalbank said in a press release.

Real GDP has been more subdued recently and rose by 0.2 percent in the fourth quarter of 2015, driven by domestic demand, while exports were flat.

The stagnated economy in the second half of 2015 has also caused the bank to scale back expectations for 2016, Nationalbank said.

The bank is more optimistic when it comes to 2017 and 2018, forecasting growth rates of 1.8 percent for both years.

"Low interest rates and oil prices continue to stimulate demand, and there has been a sizeable increase in disposable income. This supports expectations of higher growth in the economy in the coming years," the central bank said.

It also noted the upswing in the Danish economy, referring to the fact that employment has been rising steadily over the last three years.

"Employment is expected to increase by a further 75,000 persons or so from the fourth quarter of 2015 to the end of 2018, by which time spare resources in the labor market are assessed to be more or less depleted," Nationalbank said. Endit