The Danish economy is proving harder to shake than many expected. A new government forecast points to growth, rising employment, and stronger household spending in the years ahead—even as global uncertainty and US tariff hikes weigh on the outlook.
According to the Ministry of Economic Affairs, GDP is set to grow 1.4 percent in 2025 and 2.1 percent in 2026. Inflation is projected to remain below two percent, while employment continues to climb. “The Danish economy remains in good shape. Prosperity is growing, and we have high employment and low inflation,” said Economy Minister Stephanie Lose.
Expectations shift—down this year, up next
The government has revised growth downward for 2024, cutting its forecast by 1.5 percentage points after Statistics Denmark’s national accounts revision in June. But the medium-term picture looks brighter. Next year’s growth estimate has been lifted from 1.4 to 2.1 percent, driven largely by stronger exports.
Exports are forecast to rise 0.9 percent this year and 2.9 percent next year. Lose credits Danish firms’ adaptability: “Danish companies are innovative and adaptable, so we expect that they will continue to do well in export markets.”
Stronger households, more spending
It’s not just exports carrying momentum. Private consumption is also expected to pick up, with growth of 2.3 percent this year and 2.2 percent in 2026. Household purchasing power is improving, thanks to lower inflation and rising wages, though higher food prices remain a drag.
To ease that pressure, the government is cutting the electricity tax and scrapping levies on coffee and chocolate over the next two years. Tax breaks and the reintroduction of the “elderly check” are also part of efforts to leave more money in people’s pockets. “These are concrete measures that make it cheaper to be a Dane and create security about the economy,” said Lose.
Real wages on the rise
Inflation is forecast to ease further, hitting 1.7 percent this year and just 0.9 percent in 2026—helped by falling energy costs and tax cuts. Meanwhile, wages in the private sector are expected to climb by more than three percent both years. That means rising real incomes, more room for spending, and more confidence among households.
Employment is also projected to grow, keeping job prospects strong, while housing prices are expected to move upward again, boosting household wealth.
Bottom line
Global headwinds remain, but Denmark’s fundamentals look solid. With exports strengthening, wages rising, and consumption rebounding, the economy is entering the next two years on steady ground.