Denmark: Revised reading shows economic growth accelerated in Q4 2019
The economy accelerated to 0.6% in seasonally-adjusted quarter-on-quarter terms in Q4 2019 (previously reported: +0.1% quarter-on-quarter; Q3: +0.5% qoq), according to Statistics Denmark’s second GDP estimate. Meanwhile, in annual terms, the economy grew 2.3% in Q4, down from Q3’s 2.6% expansion. Overall, economic growth was stable at 2.4% in 2019.
The stronger outturn in the fourth quarter was mainly owing to a stronger expansion in private consumption (Q4: +1.8% qoq; Q3: +0.5% qoq). Moreover, government consumption also picked up pace (Q4: +1.6% qoq; Q3: +0.2% qoq), while gross fixed capital formation growth accelerated to 0.2% (Q3: +0.1% qoq), largely on a rebound in residential investment and stronger investment in machinery and transport.
On the external front, exports contracted in the fourth quarter (Q4: -0.3% qoq; Q3: +0.9% qoq), while import growth eased slightly (Q4: +0.2% qoq; Q3: +0.3% qoq).
This year, the economy is expected to contract as Covid-19 containment measures weigh heavily on private consumption levels. The unemployment rate is expected to jump notably this year, while consumer confidence should be depressed for most of 2020. Moreover, the external sector is expected to take a hit due to tepid global demand.
Fiscal stimulus should spark a relatively faster recovery once Covid-19 subsides. That said, a rebound in economic activity will largely hinge on a return to normalcy as the possibility of the virus returning will likely linger well after containment measures are eased.