Denmark

The Danish economy has experienced robust growth in recent years, with overall economic activity increasing by about 11% since 2021. More than half of this growth has been driven by the pharmaceutical sector, which has boosted Danish industrial production and exports, accounting for a quarter of total turnover in the industrial sector. However, a large and growing proportion of pharmaceutical production takes place outside Denmark, primarily in the US, accounting for almost all of the growth in goods exports in recent years. This insulates Denmark relatively well against the effects of the recent trade war, given that a significant proportion of production occurs locally. However, as production has slowed in recent quarters, exports grew significantly less in 2025 as a whole compared to previous years. Consumer spending has increased due to positive real wage growth and a tight labor market, significantly enhancing household purchasing power. Insolvencies are set to fall further in the coming years, by -1.2% in 2026 and -4% in 2027. We anticipate growth rates of +2.0% in 2026 and +2.1% in 2027. 

Danish consumer prices have fluctuated considerably in recent years. Although price increases for energy and goods have moderated, inflation in the services sector remains high due to wage pressures. In July and September 2025, consumer price inflation stood at 2.3%, the highest level recorded since mid-2023. The main driver is food products. Over the past year, the price of food and non-alcoholic beverages has increased by 6.5%. To ease food price inflation, the government is planning tax cuts on coffee and chocolate, due to take effect in 2026. The same applies to electricity prices. In 2026, inflation is expected to slow to around 1.7% as the tax cuts will temporarily curb price increases. It is then expected to rise again to 1.8% in 2027. 

Employment has grown by nearly 10% since early 2020. While this growth has primarily been driven by the private sector, particularly the pharmaceutical industry, it has also been supported by an increasing number of public-sector employees. If the pharmaceutical industry slows down, overall job growth could become more subdued in the coming years. In line with this, the number of job vacancies has declined since the beginning of the year, and hiring plans, particularly in retail, have become more cautious. Overall, the rapid increase in employment seen in recent years is starting to level off but without a significant impact on unemployment, which is expected to remain at around 3% over the next few years. The wage gap is also closing. At the start of 2025, new three-year collective agreements were reached in the private sector, leading to annual wage increases of approximately 3%.

Denmark boasts one of the most favorable business environments in the world, characterized by a competitive regulatory framework. The country has low barriers to entry, which facilitates smooth cross-border trade, and it benefits from a supportive fiscal climate. Furthermore, Denmark is a leader in technological innovation and is committed to pioneering green investment policies.