Danish 2006 Growth Revised To 2.6%

The Danish finance ministry said May 22 it had revised upwards its growth forecast for this year to 2.6% from 2.4% amid a stronger than expected economic upturn.

In 2005, Denmark posted gross domestic product(GDP) growth of 3.4%, much higher than the ministry's forecast of 2.8% reported in December.

The current public sector surplus, which reached a record last year of 61.4 billion kroner (US$ 10.5 billion) or the equivalent of 4% of GDP, is expected to total 45.8 billion kroner this year and 48.8 billion next year.

Unemployment, which is at its lowest level in 30 years, is also developing more favorably than the ministry had anticipated.

The public sector debt dropped to 35.9% of GDP in 2005, to 556.4 billion kroner. It is expected to continue to drop this year, to 28.8% of GDP, and to 24.4% in 2007.

The rate of inflation, which reached 1.8% in 2005, will meanwhile rise to 2% this year before falling back next year to 1.8%.

Finance Minister Thor Pedersen said he was pleased with the way the Danish economy was progressing but warned against the risk of overheating. "We need to keep the economy on track in order to keep growth going without causing an overheating of the labor market," he said.

Copyright Agence France-Presse, 2006

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