Energy crisis in Denmark dents outlook for 2022 and 2023

We have cut our 2022 GDP growth forecast for Denmark by 0.7ppts to 3.1% to reflect the prospect of energy shortages in Europe. As a net importer of natural gas via Germany, who is seeing reduced supply from Russia, Denmark is highly likely to see some degree of industrial gas rationing over the winter months.

What you will learn:

• Households should be protected from energy shortages, but we now see an even stronger inflationary squeeze as gas prices are set to remain high and underlying price pressures will intensify further.
• We expect GDP rebounded slightly in Q2 after Covid restrictions were eased entirely earlier this year.
• Consumption should contribute positively to growth due to higher services spending as retail sales likely declined over the quarter.