Nordic outlook – Cruising at modest speed

Global

Our forecasts are broadly stable but that does not mean all is well. We forecast a benign economic outlook from a cyclical point of view with inflation, unemployment, economic growth and interest rates close to their longer-run normal levels. However, the potential growth level has declined in the US and remains low in Europe while China struggles to reorient demand to domestic consumers. Political uncertainty is part of the growth problem. There are also risks to the nearterm outlook in both directions, for example from the US labour market, inflation and fiscal policy, and from European consumers.

Denmark

2025 has been another year with growth driven largely by the pharmaceutical industry. Despite tailwinds to household finances and a solid labour market, private consumption is very low relative to incomes, which on the one hand keeps overall economic growth subdued, but on the other provides the potential for high consumption growth in the coming years. Consumers will be further supported by a big increase in purchasing power after inflation has normalised this year and looks set to be modest in 2026 when reduced taxes on electricity, in particular, will tend to pull inflation substantially lower. House prices are rising significantly faster than consumer prices but are well aligned with interest rate and income developments across the country as a whole.

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