Danish gov't lowers GDP growth forecast for 2016, 2017

The Danish government lowered the country's economic growth expectations for 2016 and 2017 on Tuesday.

Growth in gross domestic product (GDP) is expected at 1.1 percent in 2016, as against an earlier projection of 1.9 percent in Dec. 2015 report.

Moreover, GDP growth is revised down from 2 percent to 1.7 percent in 2017, according to Denmark´s Convergence Program 2016 released by the Danish Ministry of Finance.

The program however noted that the Danish economy is progressing despite moderate GDP growth.

"The downgrade should mainly be seen within the context that exports in the second half of 2015 has been weaker than expected, and the global economy is expected to grow slower," the ministry said in the program.

Meanwhile, the fiscal room for manoeuvre in the years from 2017 to 2020 has been revised down from about 15 billion Danish krone to about 10 billion krone.

The Danish government attributed the tightening to falling oil prices and the increased public spending on the influx of refugees, saying that the room is "narrow in a historical perspective and in terms to population development."

The government is scheduled to publish a new plan for the Danish economy in the summer, which will provide the framework for fiscal policy up to 2025. (1 U.S. dollar = 6.613 Danish krones) Endit