The decline in the Danish economy in the first quarter was greater than previously assumed. This is evident from a revised national account for the first three months of the year, which Statistics Denmark has published.
In the first quarter, Denmark's gross domestic product (GDP) fell by 1.3 percent. In the first edition of the national account, which was published in May, the decline in GDP was calculated at 0.5 percent. This is therefore a downward adjustment of 0.8 percentage points. It is the decline in the pharmaceutical industry in particular that is pulling the overall economy back.
Palle Sørensen, chief economist at Nykredit, emphasizes that production in the pharmaceutical industry can fluctuate greatly from quarter to quarter. Therefore, he does not believe there is reason to panic.
- At the same time, many pharmaceutical manufacturers probably sent goods to the US in the last quarter of last year, so they were sure not to be hit by any tariffs right away, writes Palle Sørensen in a comment.
- It boosted GDP in the fourth quarter of last year, but it makes GDP look weak in the first quarter of this year, it continues.
Despite the decline in the first quarter, the Danish economy has grown by 2.3 percent over the past year.
Less progress than previously estimated
If you exclude the pharmaceutical industry, the overall economy grew by 0.4 percent in the first quarter measured by gross value added, writes Statistics Denmark. Gross value added is calculated for individual industries and is measured in basic prices without taxes or surcharges.
Statistics Denmark has also published a revised version of the national accounts for the years 2021 to 2024.
Here, it sounds like before, that the Danish economy has been growing. But it has not been quite as strong as previous calculations have indicated.
The overall growth in the economy for the years 2021 to 2024 is now calculated at 11.4 percent compared to the previous 15.9 percent. This is therefore a total downward adjustment of 4.5 percentage points. Growth has been revised down, especially in 2022 and 2023.
Tore Stramer, chief economist at the Danish Business Federation, calls it a "quite large" overall downward adjustment.
- We are therefore left with the impression that the economic recovery of recent years has been less strong than the preliminary figures otherwise indicated, he writes in a comment.
Stramer emphasizes that other markers of the state of an economy have not been affected by the downward adjustment. This applies, for example, to employment and wage growth.
/ritzau/
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