Denmark’s economy stagnated in the first quarter after businesses invested less and government spending dropped.
Gross domestic product was unchanged from the final three months of 2012, Statistics Denmark said today on its website. That compares with a preliminary estimate of 0.2 percent growth on May 31. The economy shrank an annual 0.7 percent versus a May estimate of a 0.8 percent decline.
Denmark is struggling to emerge from a burst property bubble in 2008 that triggered a banking crisis and wiped out more than a dozen lenders. The $320 billion economy, home to A.P. Moeller-Maersk A/S (MAERSKB), is also suffering from slowing export demand from the 17-nation euro area, which is contracting for the second year.
Fixed investment sank 1.5 percent while government spending declined 2.9 percent, the office said today. Private spending grew 0.1 percent while exports were unchanged.
Denmark’s government, the central bank and the country’s biggest lender Danske Bank A/S have all cut growth forecasts for this year since May 27. The government and central bank expect 0.5 percent growth in 2013, while Danske Bank sees GDP expanding 0.1 percent. The forecasters kept their 2014 estimates unchanged in the 1.4 percent to 1.7 percent range.
Unemployment has more than doubled during the crisis, as 100,000 industrial jobs were lost, the government estimates. Denmark’s gross unemployment rate was 5.8 percent in May, up from 2.5 percent in July 2008.
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