Boston, MA -- (SBWIRE) -- 12/12/2014 -- Core Views

- Although Denmark is not part of the eurozone monetary union, its deep financial and trade links have been strengthened by its pegged exchange rate regime, leaving its open economy dependent on eurozone demand and significantly exposed to any flare up of the eurozone debt crisis.
- A burst housing bubble and subsequent bank failures have made Denmark a Nordic underperformer, and the after-effects will continue to weigh on growth in the medium term. Although Denmark is in the process of staging a broad based economic recovery, the outlook remains dependent stable external demand and a sustained recovery in house prices.
- Denmark's regional relative safe haven status faces few imminent risks given favourable public debt dynamics and stable fixed currency regime. However, this inflow of capital has masked structural economic problems, and should investors start leaving the country it could expose an array of problems, most problematic of which could be a rise in interest rates and drop in house prices.
- The government of Denmark has repeatedly expressed its commitment to its pegged currency regime, confirming our view that the country will not join the eurozone in the next decade.
- The public sector will remain one of the largest in Europe for the foreseeable future, as Denmark's deeply ingrained welfare model remains broadly popular. However, gradual reforms are likely to continue in the coming years that scale back benefit programs and reduce the tax burdens.
- Although we expect public expenditure to remain elevated, the government's substantial tax revenues will enable it to keep deficit and debt levels on a sustainable trajectory.

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Major Forecast Changes

- No Major Forecast Changes

Risks To Outlook

- A major risk to Denmark's medium-term macroeconomic trajectory stems from ongoing economic and financial developments within the eurozone. Denmark has sizeable trade and investment linkages with the common currency bloc, and a major...

The Denmark Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Denmark and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Denmark's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

- Forecast the pace and stability of Denmark's economic and industry growth through end-2018.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Denmark's country risks against regional peers using BMI's country comparative Risk Rankings system.
- Evaluate external threats to doing business in Denmark, including currency volatility, the commodity price boom and protectionist policies.

The Denmark Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Denmark economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Denmark through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Denmark Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).

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