Economic Survey of Denmark 2012

The current international slowdown entails new risks for the Danish economy, which so far had been recovering only slowly and unevenly from the unwinding of a massive domestic property boom and the global crisis that erupted in 2007 08.

The main challenge is to secure the necessary space for policies to cope with potential further adverse shocks by sticking to the current plans and to bring about strong, sustainable and greener growth.

The economy displays a number of strengths. The fiscal position is relatively sound. The flexicurity system helps adjust to shocks while limiting the social cost of unemployment and the risk that it becomes entrenched. The welfare system ensures low poverty and inequality. However, competitiveness has deteriorated in the past decade and productivity growth has been weak, eroding potential growth. Moreover, vulnerabilities remain in the financial sector.

Denmark’s green growth ambitions might translate into new sources of growth, but energy and climate change policies need to be reviewed to achieve better results at low cost.

Download the Overview of the Economic Survey of Denmark 2012