Once the seat of Viking raiders and later a major north European power, Denmark has evolved into a modern, prosperous nation that is participating in the general political and economic integration of Europe. It joined NATO in 1949 and the EEC (now the EU) in 1973. However, the country has opted out of certain elements of the EU's Maastricht Treaty, including the European Economic and Monetary Union, European defense cooperation, and issues concerning certain justice and home affairs.
Northern Europe, bordering the Baltic Sea and the North Sea, on a peninsula north of Germany (Jutland); also includes several major islands (Sjaelland, Fyn, and Bornholm)
petroleum, natural gas, fish, arable land, salt, limestone, chalk, stone, gravel and sand
Population - distribution
with excellent access to the North Sea, Skagerrak, Kattegat, and the Baltic Sea, population centers tend to be along coastal areas, particularly in Copenhagen and the eastern side of the country's mainland
Danish, Faroese, Greenlandic (an Inuit dialect), German (small minority)
COPENHAGEN (capital) 1.268 million (2015)
- Conventional long form
- Kingdom of Denmark
- Conventional short form
- Local long form
- Kongeriget Danmark
- Local short form
parliamentary constitutional monarchy
- Geographic coordinates
- 55 40 N, 12 35 E
- Time difference
- UTC+1 (6 hours ahead of Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins last Sunday in March; ends last Sunday in October
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
This thoroughly modern market economy features a high-tech agricultural sector, advanced industry with world-leading firms in pharmaceuticals, maritime shipping, and in 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.
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ 24,836,549,494
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 141,508,744,662
- Exports of goods and services
- US$ 162,558,942,336
- Total Merchandise Trade
- FDI, net inflows
- US$ 454,651,280
- Commercial Service Exports
- US$ 58,411,987,635
barley, wheat, potatoes, sugar beets; pork, dairy products; fish
iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture and other wood products, shipbuilding and refurbishment, windmills, pharmaceuticals, medical equipment
- machinery and instruments, meat and meat products, dairy products, fish, pharmaceuticals, furniture and design, windmills
- Germany 15.1%, Sweden 11.4%, Norway 6.2%, UK 6%, US 5%, Netherlands 4.5%, China 4.2% (2016)
- machinery and equipment, raw materials and semimanufactures for industry, chemicals, grain and foodstuffs, consumer goods
- Germany 21.4%, Sweden 12.3%, Netherlands 8%, China 7.6%, UK 4.2%, Norway 4.2% (2016)
- Country Risk Rating
- The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.
- Business Climate Rating
- The business environment is very good. Corporate financial information is available and reliable. Debt collection is efficient. Institutional quality is very good. Intercompany transactions run smoothly in environments rated A1.
- World's fifth largest ship operator
- Energy self-sufficiency (North Sea and Greenland oil and gas), net energy exporter
- Niche industries (renewable energies/biotechnologies)
- Large current account balance surplus
- Open economy sensitive to external demand
- Declining competitiveness of manufacturing companies
- Very high household debt levels (290% of disposable income)
- Scale of public sector employment (30% of employees)
The slow rate of growth of exports and consumption in 2016 thwarted the expected acceleration in growth. In 2017, there is likely to be a moderate upturn in activity, driven by domestic factors. Household consumption will underpin growth thanks to improvements in the labor market. Households are expected to spend more as wages and job opportunities increase, despite the very high debt levels (290% of disposable income, the highest ratio in the OECD). At the same time, increased household incomes will push up property prices as well as residential investment, in a context of very low interest rates. The danger of the property bubble bursting would increase if interest rates were to be raised.
In addition, investment will make a positive contribution to growth, sustained by increased consumption and a relaxed monetary policy on the part of the Central Bank. The sectors in question are the pharmaceutical, capital goods (transport in particular) and construction sectors. These sectors, with large workforces, will sustain economic activity thanks to an improved utilization of production capacities, part of the reason for lower unemployment. The position of the energy (oil and gas) sector in the economy will however gradually decline and will remain subject to low raw material prices.
Inflation is expected to increase in 2017 as a result of the slow rise in oil prices alongside higher wages. The Danish Central Bank’s relaxed monetary policy (policy interest rates: 0%; deposit rates: -0.65% since February 2015) is likely to continue in the short term bearing in mind the low level of inflation, and the pegging of the Danish krone to the euro. This policy has in particular enabled the maintenance of the competitiveness of its exports whilst helping sustain the domestic demand.
Given the low level of unemployment, government policy is not expected to focus on boosting activity through employment. The government will thus continue its prudent budget policy aimed at avoiding potential labor shortages in certain sectors. Nevertheless, any increase in the public deficit in 2017 will be due to a falling off of tax receipts arising from the Pension Yield Tax on pension providers’ added-values, which were at a particularly high level in 2016. Public expenditure will fall slightly but still remain at a high level. The 2017 budget however includes measures aimed at improving the healthcare system and the collection of taxes, as well as boosting aid for refugees and displaced persons from conflict zones (particularly the Middle East). The deficit as well as the public debt will therefore remain well below the threshold defined by the European Stability and Growth Pact (respectively 3% and 60% of GDP).
The current account surplus will hold steady in 2017. This will be due mainly to the vitality of exports, boosted by the past depreciation of the krone pegged to the euro, which will offset the consumption driven rise in imports. Exports of agricultural products (pork, milk) will be the most dynamic, mainly towards Asian countries and Germany. Machines and transport equipment will also feature among the leading exports, alongside chemical (biotechnology) products.
Brexit however could have a negative impact on exports as a result of declining demand in the United Kingdom (3rd biggest export market) and thus reduce the country’s current account surplus.
Lars Løkke Rasmussen was elected Prime Minister in the parliamentary elections in June 2015, with a four year term of office. The right-wing grouping (including all the right-wing parties such as Venstre, the Prime Minister’s party, and the extreme right of the Danish People’s Party (DPP)), won a majority in parliament against the left grouping including in particular the Social Democrats (SD). The liberal party (Venstre), which heads the government, holds only 34 of the 179 seats in Parliament. The significant disagreements between the various right-wing coalition parties does not leave the Prime Minister much room for maneuver in carrying out reforms. The far-right party (DPP) does not support the government’s strategic growth plan (2017-2025) which includes a reduction in taxes on companies and high incomes. The continuation of these disagreements could result in early elections as of 2017.
The business climate in the country will be very positive and ranks third in the Doing Business 2017 survey behind New Zealand and Singapore.