Denmark’s central bank lowered the country’s economic growth expectations for 2011 and 2012 on Thursday.
Growth in gross domestic product (GDP) is expected at 1 percent in 2011, in comparison to the previous year.
Moreover, GDP growth is forecast at 1.1 percent in 2012, Danmarks Nationalbank said in its review of the Danish economy’s fourth-quarter performance.
The new figures represent a reduction from the previously forecast of 1.4 percent and 1.6 percent GDP growth in 2011 and 2012, respectively.
“Activity in the Danish economy has decreased since summer, and the first real forward movement is expected only from the middle of 2012,” said central bank governor Nils Bernstein in a statement released in connection with the fourth-quarter review.
“The unclear situation surrounding the European debt crisis means that the uncertainty surrounding developments in the Danish and international economy is great at the moment. It can go either way,” he added.
However, the central bank expects 1.6 percent growth in 2013, indicating a longer-term positive development.
“Despite the modest growth projections, growth here (in Denmark) is expected to be better than that in the euro area, where high debt and public deficits are making serious fiscal tightening a necessity,” Danmarks Nationalbank said in the statement.
Yet the Danish economy could suffer much worse should Denmark’s neighboring economies slip into recession. In that scenario, GDP growth is expected at just 0.3 percent in 2012, and 0.9 percent in 2013, the central bank said.