Economic growth is stagnating in several key EU countries, which is bad news for Denmark as most of them are key export markets.
On the verge of recession
New figures from Eurostat, the EU statistics provider, indicate that even though overall growth in the EU stands at 0.2 percent in 2019, there has been negative or zero growth in several major European markets, including Germany, Italy, Sweden and the UK.
German growth remains stagnant mainly due to the US-China trade war, which has resulted in its exports to China falling drastically. A peripheral reason is that despite the economic turmoil, Germany refuses to move ahead with borrowed money.
“The negative growth figures are sounding a death knell for a golden decade in the German economy,” Dutch bank ING told CNN.
Detrimental to Denmark’s economy
Danish exports accordingly fell heavily in 2018 to its three biggest markets –Germany (down 15 percent), Sweden (-12 percent) and the UK (-8 percent) – which account for almost one-third of its total exports.
The economic crisis in these countries will mean they will be able to afford fewer goods from Denmark.
“The decline in Germany, Sweden and the UK is definitely not good news for Danish exports. We hope the economy will gain more momentum in the latter half of 2019,” Allan Sørensen, the chief analyst at Dansk Industri, told TV2.
“But with weak confidence indicators and the increased chances of a No Deal Brexit, it unfortunately does not look too promising.”
A global financial crisis again?
Outside Europe the likes of Brazil and Mexico are also anticipating a recession.
“There is an increased risk of recession within the next three years,” said Henrik Franck, the chief executive of the financial company Formuepleje, told TV2.