Denmark Economy Overview
Economic trends
The economy of Denmark is based on strong fundamentals. Its GDP per capita ranks second highest (behind Luxembourg) in the EU. Denmark with its industrialized market economy depends heavily on imported raw materials and foreign trade. Danes devote about 1% of gross national product (GNP) to foreign aid to less developed countries. Tax cuts and lowering of interest rates (initiated in 2003) have helped in stimulating the domestic consumer demand. The GDP growth rate was 1.9% in 2004 and 3.2% in 2005. A strong budget surplus will allow the government to maintain a moderately expansionary fiscal policy in 2007-08. IMF forecasts a slow down in GDP from 3.5% in 2006 to 2.3% in 2007. The unemployment rate is under control (estimated at 4.8% in 2006) while as the inflation is estimated around 1.8%.
Main branches of industry
Denmark has limited natural resources and as a result the development of heavy industry is restrained. However, the country has enough oil and gas reserves which can ensure its energy independence. The major activity sectors are: chemical and pharmaceutical, biotechnology, and services (73% of GDP). Denmark is the world’s leading manufacturer of wind turbines and exports 85% of its production. The agriculture sector only accounts for 2.3% of the GDP. Two-third of the agricultural production is exported. More than one-fourth of the country’s labour force is employed in the public sector.
International trade
Denmark advocates a liberal trade policy. Denmark is a member of EU but doesn’t currently participate in the single currency. The share of foreign trade in country’s GDP is approximately 82%. Nearly two-thirds of the foreign trade is carried out with EU. The top three import partners are: Germany, Sweden and the Netherlands. Denmark mainly imports electric & mechanical equipment, machinery, vehicles, mineral fuels & oils, raw materials and semi-manufactured products. The top three export partners are: Germany, Sweden and the United Kingdom. The goods mainly exported are electric & mechanical equipment, machinery, mineral fuels & oils, pharmaceutical products, and meat & food products.
