The Danish economy will escape the US tariff war with the skin on its nose if US tariffs remain at their current level. This is the conclusion of the forecast for the Danish economy that the Confederation of Danish Industries has just prepared.
It appears that the Danish gross domestic product will grow by 3.3 percent this year and 1.8 percent next year if the general tariff rates of ten percent are maintained. And employment will increase in both 2025 and 2026 if the premise does not change. Allan Sørensen, chief economist at the Confederation of Danish Industries, emphasizes, however, that there is a fair amount of uncertainty associated with the forecast.
- The uncertainty is particularly related to what is happening in the US and the tariffs on goods from the rest of the world. As recently as Monday, an agreement was reached on lower tariffs between the US and China, and therefore we had to adjust and recalculate the forecast.
- But we have basically based it on the tariffs that apply right now, even though we know that some of them have been formally paused and are about to be increased in the long term.
Strong 2025 forecast
Regardless of what happens with the tariffs, it probably won't change the 2025 forecast much.
- We are entering the year strong. The Danish economy grew strongly last year, and if we look at employment and private consumption, both have grown further into 2025.
- So we have some figures for industrial production and exports that show some challenges at the start of the year. On the other hand, we have reopened the Tyra field, and the public sector will spend a lot of money this year, and that helps to keep growth going, says the chief economist.
At the Confederation of Danish Industry, they believe that the very high tariffs that were introduced by Trump in April - but have since been suspended - are a negotiating proposition.
Therefore, the hope is that the EU and some of the US's other major trading partners can make some agreements so that the high tariffs do not become a reality.
- We must also remember that if the Americans raise the tariffs to high levels, they will end up in recession and inflation will rise over there. They probably want to avoid that, and this suggests that this scenario is less likely, says Allan Sørensen.
/ritzau/
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