Business Environment in Denmark
The country was strongly hit by the financial crisis, due to its high degree of openness to international trade and to the high level of financialization of its economy. However, profiting from the resumption of trade, Denmark has experienced a more dynamic economic recovery than its European neighbors. GDP growth is estimated at 2% in 2010.
Fiscal and social measures adopted by the government in order to mitigate the effects of the crisis have destabilized public finances. Government’s priority in 2011, which was defined as part of a consolidation plan, is to lower the budget deficit by decreasing spending and increasing revenue.
Structural reforms are also planned. Denmark's economy suffers from relatively low productivity. The costs of employment are high but the number of working hours is low and there are many active adults receiving income benefits. The goal has been therefore to promote the human capital and encourage late retirement. Faced with the depletion of its petrol and natural gas reserves, the country has also set itself ambitious goals in terms of its energetic policy.
Denmark is a wealthy country, its per capita GDP figures among the highest in the world and its social inequalities are small. Although the unemployment rate remains low on European scale, it has clearly increased following the economic recession.
|GDP (billions USD)||308.93||310.76||337.81e||350.36||361.52e|
|GDP (Constant Prices, Annual % Change)||-5.2||2.1||2.0||2.0||2.0|
|GDP per Capita (USD)||56,052||56,147e||60,962e||63,051e||64,881|
|General Government Balance (in % of GDP)||0.0||-1.7e||-0.8||-0.2||0.3|
|Inflation Rate (%)||1.3||2.3||2.0||2.0||2.0|
|Unemployment Rate (% of the Labor Force)||3.6||4.2||4.5||4.4||4.0e|
|Current Account (billions USD)||12.36||9.69e||8.30||6.91||-|
|Current Account (in % of GDP)||4.0e||3.1e||2.6||2.0||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
The agricultural sector only accounts for 1.3% of the GDP and employs merely 2.7% of the population. Nevertheless, Denmark has become one of the major exporters of agricultural products. Two-thirds of its agricultural production are exported. Most of the Danish land is used for agriculture and there are more than 50,000 farmers in Denmark. Nearly 90% of the country's agricultural revenue comes from livestock production.
Denmark has limited natural resources, a fact which slows down the development of its heavy industry. However, the country has enough oil and gas reserves to ensure its energy freedom. Denmark is the world's leading manufacturer of wind turbines and exports 85% of its production. The major activity sectors are: chemical and pharmaceutical, biotechnology and services (approximately three-fourths of the GDP).
The services sector contributes nearly three-fourths of the GDP and provides most employment.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||2.7||22.6||74.3|
|Value Added (in % of GDP)||0.9||22.5||76.6|
|Value Added (Annual % Change)||19.7||-11.1||-2.5|
Source: World Bank - Last Available Data.
|Danish kroner (DKK) - Average Annual Exchange Rate For 1 USD||6.00||5.95||5.44||5.10||5.36|
Source: World Bank
Indicator of Economic Freedom
- Mostly free
- World Rank:
- Regional Rank:
Foreign Trade in Figures
Historically a nation of traders, Denmark's economy is extremely open to the outside. Trade represents more than 100 of the GDP.
The trade balance is structurally positive, a tendency which was only strengthened by the combined effects of a decrease in imports linked to a lower domestic demand and the recovery of internation trade.
Denmark's main trade partners are Germany, Sweden, the Netherlands, UK, USA and China.
|Foreign Trade Indicators||2006||2007||2008||2009||2010|
|Imports of Goods (million USD)||85,507||98,027||109,981||82,650||84,432|
|Exports of Goods (million USD)||92,558||103,011||116,567||93,916||97,211|
|Imports of Services (million USD)||44,235||52,893||61,398||49,594||48,988|
|Exports of Services (million USD)||51,515||60,662||71,561||54,170||57,815|
|Imports of Goods and Services (Annual % Change)||13.4||4.3||2.7||-12.5||-|
|Exports of Goods and Services (Annual % Change)||9.0||3.7||-||-||-|
|Imports of Goods and Services (in % of GDP)||48.9||50.0||52.0||44.0||-|
|Exports of Goods and Services (in % of GDP)||52.1||52.3||55.2||47.8||-|
|Trade Balance (million USD)||3,048||391||919||8,103||-|
|Trade Balance (Including Service) (million USD)||10,124||8,359||9,391||-||-|
|Foreign Trade (in % of GDP)||101.0||102.4||107.2||91.7||-|
Source: WTO - World Trade Organization ; World Bank
Main Partner Countries
(% of Exports)
|Other partnersClose extended list||52.0%|
(% of Imports)
|Other partnersClose extended list||46.8%|
Sources of General Economic Information
Ministry of Economic and Business Affairs
Ministry of Finance
Ministry of Food, Agriculture and Fisheries
- Statistical Office
- Central Bank
Danish National Bank
- Stock Exchange
Copenhagen Stock Exchange
- Search Engines
- Economic Portals
- Executive Power
- The Monarch is the head of the state and theoretically holds all executive powers. But in reality the executive powers are exercised on behalf of the monarch by the Prime Minister.
- Legislative Power
- Following legislative elections, the leader of the majority party or the leader of the majority coalition is usually appointed Prime Minister by the monarch for a four-year term. The cabinet, called Council of State, is appointed by the Monarch on Prime Minister's recommendation.
The legislature is unicameral. The parliament called People's Assembly has the ultimate legislative authority; its members are elected by popular vote on the basis of proportional representation to serve four-year terms. On a vote of no confidence motion the parliament may force the entire government to resign.
- Main Political Parties
- Denmark has a multi-party system, with the following four parties as major political parties:
- Liberal Party ? a social liberal party, advocates major reforms in country's education & tax systems;
- Social Democratic Party ? follows social-democratic ideology, supports public spending on healthcare, education and infrastructure;
- Conservative People's Party ? a conservative centre-right political party;
- SF (Socialist People's Party) ? follows popular-socialism inspired by socialism and green politics.
- Current Political Leaders
- Monarch: Queen Margrethe II (since January 1972); heir apparent Crown Prince FREDERIK
Prime Minister: Lars Lokke Rasmussen since April 5, 2009 – Liberal Party, heading a coalition government with Conservative People's Party.
- Next Election Dates
- Parliamentary: November 2011
Indicator of Freedom of the Press
- World Rank:
- 14 places up compared to 2008
Indicator of Political Freedom
- Political Freedom:
- Civil Liberties:
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