FX.co ★ Danish Economy Shrinks in Q1

In the first quarter of 2025, Denmark's economy experienced a contraction of 0.5% from the previous quarter, following a revised growth of 1.6% in the final quarter of 2024, according to preliminary estimates. This economic setback was primarily attributed to a downturn in the pharmaceutical sector. Additionally, net external demand had a negative impact, with exports declining by 3.0% compared to an increase of 3.6% in Q4 2024, whereas imports saw a lesser decrease of 0.3% after a previous rise of 3.8%. Fixed investments plummeted by 6.3%, in contrast to a prior 10.2% increase, driven by reduced investment in machinery and transport equipment, which fell by 1.9% compared to a 9.9% gain, and a significant drop in intellectual rights investments, which decreased by 21.8% after a 31.7% surge. Furthermore, government spending saw a decline of 1.1%, down from a 1.5% increase, while growth in household consumption decelerated to 0.2% from 0.4%, partly attributed to a 2.0% reduction in vehicle purchases following a modest 0.3% uptick. Year-over-year, the GDP grew by 3.6% for the March quarter, after a downward revision of the preceding quarter’s growth to 4.2%.