GDP growth ticks down in the third quarter

Economy loses steam but outpaces both market expectations and Euro area average: According to a preliminary estimate, economic growth edged down to 1.2% on a seasonally adjusted quarter-on-quarter basis in Q3 from Q2’s upwardly revised 1.3%. That said, the reading surprised markets on the upside and beat the Euro area average of 0.4%. On an annual basis, economic growth picked up to 3.9% in Q3 from the previous quarter's 3.5% expansion, marking the fastest growth since Q4 2023.

Fixed investment and net trade drag on growth: Domestically, the sequential downtick chiefly reflected a slowdown in fixed investment, which rose 0.9% in Q3 (Q2: +1.8% qoq s.a.) and marked the worst result since Q4 2023. In particular, the reading was dented by softer momentum in investments in housing plus other construction and facilities. More positively, private consumption rebounded 0.3% in Q3 (Q2: -0.3% qoq s.a.), marking the best reading since Q4 2023. Similarly, public spending returned to growth, posting a 0.5% expansion in Q3 (Q2: -0.1% qoq s.a.). On the external front, growth in exports of goods and services slowed to a halt in Q3, deteriorating from the previous quarter’s 4.1% increase. Meanwhile, imports of goods and services fell 0.7% in Q3, compared to Q2’s 1.3% rise. As a result, net trade subtracted from growth in Q3 after having had a positive impact in Q2. From a production point of view, the pharmaceutical industry was once again the chief driver of Q3’s reading. A second national accounts data release for Q3 will be published on 23 December.

Economic growth to remain robust, but pharma industry remains key risk factor: Our panel expects the economy to be slowing to a near crawl in Q4 and to post a softer expansion in 2024 as a whole compared to 2023. Economic growth is then forecast to tick up from 2024’s projection in 2025 and gradually cool through 2029. That said, the outlook is uncertain due to potential fluctuations in the pharmaceutical industry, on which the Danish economy remains heavily dependent.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Danish GDP projections for the next ten years from a panel of 16 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Danish GDP.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Danish GDP projections.

Want to get access to the full dataset of Danish GDP forecasts? Send an email to info@focus-economics.com.