Economy - overview: This thoroughly modern market economy features a high-tech agricultural sector, advanced industry with world-leading firms in pharmaceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a net exporter of food, oil, and gas and enjoys a comfortable balance of payments surplus, but depends on imports of raw materials for the manufacturing sector. Danes enjoy a high standard of living and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. An aging population will be a long-term issue.
Denmark is a member of the EU; Danish legislation and regulations conform to EU standards on almost all issues. Despite previously meeting the criteria to join the European Economic and Monetary Union, Denmark has negotiated an opt-out with the EU and is not required to adopt the euro. Within the EU, Denmark is among the strongest supporters of trade liberalization.
Denmark is experiencing a modest economic expansion. The economy grew by 1.6% in 2015 and an estimated 1.0% in 2016. The expansion is expected to continue at similar rates in 2017 and 2018. The labor market has strengthened since 2013, and unemployment stood at 4.2% in early 2017, based on the national measure. By early 2017 some sectors were experiencing difficulties attracting qualified labor. Productivity growth was significantly below the OECD average from the mid-nineties until 2011, but has increased in recent years. Improvement in productivity is needed to ensure continued growth.
Denmark maintained a healthy budget surplus for many years up to 2008, but with the global financial crisis the budget balance swung into deficit. For 2016 the budget deficit was 1.4%. The government projects lower deficits in 2017 and 2018. Public debt (EMU debt) is projected to continue to decline. Household indebtedness is still relatively high at more than 292% of net disposable income in 2015, while household net worth - from private pension schemes and other assets - amounted to 497% of net disposable income.
Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.
Source: CIA World Factbook - This page was last updated on July 9, 2017