Denmark
Year: 2025
Type: article
Abstract: The Article IV Consultation discusses that Denmark’s strong growth has continued, primarily driven by pharmaceutical exports. Public finances and external positions are robust, and the financial system has demonstrated resilience to multiple shocks in recent years. Although Denmark’s fiscal position is strong, significantly higher and more persistent increases in defense spending would require adjustment measures to ensure long-term fiscal sustainability. Growth is expected to moderate in the near term as external demand weakens and the exceptional pharmaceutical expansion begins to normalize. Systemic risks are contained; however, the authorities should remain vigilant in monitoring financial sector risks. Banks are well-capitalized, with strong profitability, asset quality, and liquidity. Structural reforms should further intensify to sustain high levels of income, preserve fiscal space, and sustain the welfare state. The policy priority is to uphold fiscal sustainability amid rising defense and aging-related expenditures, ensure financial stability, and further intensify structural reforms to support high levels of income and sustain the welfare state.
Source: IMF Staff Country Reports
Author: International Monetary Fund. European Dept.
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4411981525