Economy of Denmark
 | |
| Currency | Danish krone (DKK, kr) |
|---|---|
| calendar year | |
Trade organisations | EU, WTO, OECD and others |
Country group | |
| Statistics | |
| Population |  5,834,950 (February 2022)[3] |
| GDP | |
| GDP rank | |
GDP growth |
|
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
Population below poverty line | |
 27.5 low (2019, Eurostat)[8] | |
Labour force | |
Labour force by occupation |
|
| Unemployment | |
Average gross salary | DKK 46,070 / €6,191/ US$6,512 monthly (2019) |
| DKK 29,102 / €3,911 / US$4,113 monthly (2019) | |
Main industries | wind turbines, pharmaceuticals, medical equipment, shipbuilding and refurbishment, iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture and other wood products |
 4th (very easy, 2020)[16] | |
| External | |
| Exports | $113.6 billion (2017 est.)[17] |
Export goods | wind turbines, pharmaceuticals, machinery and instruments, meat and meat products, dairy products, fish, furniture and design |
Main export partners |
|
| Imports | $94.93 billion (2017 est.)[17] |
Import goods | machinery and equipment, raw materials and semimanufactures for industry, chemicals, grain and foodstuffs, consumer goods |
Main import partners | |
FDI stock | |
| $24.82 billion (2017 est.)[17] | |
Gross external debt | $484.8 billion (31 March 2016 est.)[17] |
| 64.6% of GDP (1 July 2018)[18] | |
| Public finances | |
| Revenues | 53.3% of GDP (2019)[19] |
| Expenses | 49.6% of GDP (2019)[19] |
| Economic aid | ODA, 0.72% of GNI (2017)[20] |
| |
Foreign reserves | $75.25 billion (31 December 2017 est.)[17] |
All values, unless otherwise stated, are in US dollars. | |
5,8% in poverty (2016)
The economy of Denmark is a modern mixed economy with comfortable living standards, a high level of government services and transfers, and a high dependence on foreign trade. The economy is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture. The nominal gross national income per capita was the seventh-highest in the world at $58,439 in 2020. Correcting for purchasing power, per capita income was Int$57,781 or 10th-highest globally.[24] The Income distribution is relatively equal, but inequality has somewhat increased during the last decades. This increase was attributed to both a larger spread in gross incomes and various economic policy measures.[25] In 2017, Denmark had the seventh-lowest Gini coefficient (a measure of economic inequality) of the then 28 European Union countries.[26] With 5,822,763 inhabitants (1 January 2020),[27] Denmark has the 36th largest national economy in the world measured by nominal gross domestic product (GDP), and the 51st largest in the world measured by purchasing power parity (PPP).
As a small open economy, Denmark generally advocates a liberal trade policy, and its exports as well as imports make up circa 50% of GDP. Since 1990 Denmark has consistently had a current account surplus, with the sole exception of 1998. As a consequence, the country has become a considerable creditor nation, having acquired a net international investment position amounting to 65% of GDP in 2018. A decisive reason for this are the widespread compulsory funded labour market pensions schemes. The schemes have caused a considerable increase in private savings rates, and today play an important role for the economy.
Denmark has a very long tradition of adhering to a fixed exchange-rate system and still does so today. It is unique among OECD countries to do so while maintaining an independent currency: The Danish krone, which is pegged to the euro. Though eligible to join the Economic and Monetary Union of the European Union (EMU), the Danish voters in a referendum in 2000 rejected exchanging the krone for the euro. Whereas Denmark's neighbours like Norway, Sweden, Poland and the United Kingdom generally follow inflation targeting in their monetary policy, the priority of Denmark's central bank is to maintain exchange rate stability. Consequently, the central bank has no role in a domestic stabilization policy. Since February 2015, the central bank has maintained a negative interest rate to contain an upward exchange rate pressure.
In an international context, a relatively large proportion of the population is part of the labour force, in particular because the female participation rate is very high. In 2017, 78.8% of all 15-to-64-year-old people were active on the labour market, the sixth-highest number among all OECD countries. The unemployment is relatively low, in comparison to other European countries. In October 2018, 4.8% of the Danish labour force were unemployed, as compared to an average of 6.7% for all EU countries.[28] There is no legal minimum wage in Denmark.[29] The labour market is traditionally characterized by a high degree of union membership rates and collective agreement coverage. Denmark invests heavily in active labor market policies and the concept of flexicurity has been important historically.
Denmark is an example of the Nordic model, characterized by an internationally high tax level, and a correspondingly high level of government-provided services (e.g. health care, child care and education services). There are also income transfers to various groups, such as retired or disabled people, unemployed persons, students, etc. Altogether, the amount of revenue from taxes paid in 2017 amounted to 46.1% of the GDP. The Danish fiscal policy is generally considered healthy. The net government debt is very close to zero, amounting to 1.3% of GDP in 2017. The Danish fiscal policy is characterized by a long-term outlook, taking into account likely future fiscal demands. During the 2000s, a challenge was perceived to government expenditures in future decades. It was ultimately a challenge to fiscal sustainability from demographic development, in particular higher longevity. Responding to this, age eligibility rules for receiving public age-related transfers were changed. Since 2012, calculations of future fiscal challenges, from both the government and independent analysts, have generally perceived Danish fiscal policy to be sustainable. In recent years, it was considered overly sustainable.
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