Debt crisis squeezez exports
The world economy is clearly recovering and is close to having returned to normal growth. But the Danish economy is plagued with growth problems after many years of wearing down its competitiveness and because of the current European debt crisis.
The result is that Denmark can only expect to win a small share of the recovery.
“In the course of the recession the additional costs in Denmark accelerated to 30 percent. It takes time before we have restored our competitiveness,” says DI Chief Economist Klaus Rasmussen.
Since several of Denmark’s most significant export markets in Europe are also affected by low growth as a result of the debt crisis, a new DI prognosis predicts that export growth will only reach 1.7 percent this year and 3.4 percent next year excluding changes in inventories.
Denmark is currently losing market share in the order of 2 percent annually. Our market share has decreased by nearly 20 percent since 1992. With the new collective agreements, however, it is likely that the increase in Danish cost levels will wane.