Denmark: The economy contracts marginally in Q1 2022
Economic activity felt a pinch due to the spread of the Omicron variant in the first quarter of 2022, with GDP contracting a marginal 0.1% in seasonally-adjusted quarter-on-quarter terms, according to a preliminary release. The result came in markedly below the final quarter of 2021’s 3.0% expansion. Meanwhile, on an annual basis, growth was stable at Q4 2021’s 6.8% in Q1.
The quarterly outturn was largely a result of the restrictions imposed in January to contain the spread of the Omicron variant. Consequently, activity in service industries declined, which more than offset strong growth in the industrial and construction sectors. Lower pandemic-related health spending also weighed on the services sector. Additionally, government spending growth slowed amid a tough base effect. Lastly, the employment indicator increased 0.9% in Q1, which should have sustained private consumption in the period.
A more comprehensive release will be published on 31 May.