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Among the conclusions made by Lars Nørkjær Nielsen is that most indicators suggest tentative recovery in the Danish economy. However, a recovery in the Danish economy completely relies on a continuance of the trend towards high growth in consumption seen in the fourth quarter of 2003. The government's Spring Package will boost private consumption further, and we will therefore see a growth in private consumption of 3.3 per cent in 2004, up from previously forecast 2.7 per cent. Consequently, we expect a GDP growth rate of 2.1 per cent in 2004 as against 1.9 per cent assessed in December 2003.
Growth on the export markets will, however, not be as buoyant as previously forecast. The Danish businesses will find it difficult to maintain their market shares. To this should be added that not least the European market has disappointed, and according to Lars Nørkjær Nielsen total Danish foreign trade will contribute negatively to economic growth.
The government's Spring Package will stimulate the publicly subsidised housing construction. Housing prices will at the same time rise by 4-5 per cent as a result of interest-only mortgages and a handsome rise in households' disposable income. The gap between new-building costs and housing prices will thus widen further, and the incentives for new building will thus be strengthened. Despite these positive trends, construction will be far from capacity.
Read 'The Danish economy' in Focus no. 79 on the Copenhagen Stock Exchange's website www.cse.dk.
