Denmark: Economy enters technical recession in Q3
The Danish economy undershot market expectations and contracted further in the third quarter of 2023, after falling in Q2. GDP decreased at a rate of 0.3% quarter on quarter in seasonally adjusted terms in Q3, according to a preliminary estimate. The result matched Q2‘s and was the second consecutive GDP drop and joint-worst reading since Q1 2022. Q3’s downturn was steeper than the Euro area average of -0.1%.
While detailed information is not yet available, the quarterly decline was likely due to a poor-performing industrial sector, particularly the pharmaceutical industry—–which accounts for roughly 5% of the Danish economy and previously supported growth—contracted over 10%. Specifically, Novo Nordisk, Europe’s most valuable company and producer of popular diabetes and weight-loss drugs like Ozempic, sustained large manufacturing problems after growing over 30% year on year in H1 2023. Conversely, transport activity improved compared to the previous quarter.
Elsewhere in the domestic economy, the employment indicator posted a 0.3% increase, which, coupled with Q3’s downward trend in inflation, will have supported private spending in the quarter.
Meanwhile, year-on-year growth decelerated, coming in at 0.8% in the third quarter, below the 0.9% increase tallied in the prior quarter. The result was notably stronger than the Euro area’s 0.1% average rise.
A more comprehensive release will be published on 30 November.