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Denmark's outlook for growth is upbeat despite Novo Nordisk problems

The Danish economy minister raised his forecasts for economic growth in Denmark by a large amount on Thursday. This was due to the strong performance of the pharmaceuticals sector, which has been thriving despite recent layoffs within drugmaker Novo Nordisk.

The Danish GDP will grow by 2.6% in this year. This is up from the previous August prediction of 1.4%. Denmark now has one of the highest growth rates in Europe, ahead of other major economies such as Germany, France, and Italy.

The government increased the GDP forecast to 2,2% for 2026 from 2.1%. However, it predicted that the GDP would slow down to 1,6% the following year.

The pharma industry has once again surprised positively the Danish economy, Economy Minister Stephanie Lose said at a press briefing.

The weight-loss industry of Novo Nordisk, the maker of Wegovy, has boomed in Denmark in recent years. In 2024, the growth rate in Denmark will be among the highest in Europe.

NOVO NORDISK SLOPDOWN NOT A SYSTEMIC CONCERN

Novo Nordisk has been struggling with a slowing growth in sales due to increased competition on the obesity drug market.

Profit warnings

This year, 9,000 workers were laid off, including more than half in Denmark.

Lose stated that the lower growth rates of Novo Nordisk did not represent a concern to the Danish economy. "The pharmaceutical sector is not very diversified in the Danish economic system, and much of its contribution to growth comes through activities overseas, such as when Novo Nordisk manufactures in the United States."

She said that the outlook was also strengthened by an economic strength beyond the pharmaceutical industry.

Denmark, home to companies such as the shipping group Maersk and brewer Carlsberg and toymakers Lego and Vestas wind turbines, expressed concern that trade wars or tariffs might dampen growth.

Lose added that the Danish economy had so far beaten the headwinds, and was extremely strong. The GDP growth for the third quarter of this year was the highest since four years.

She added, "Employment is continuing to increase, inflation is low, stable and the purchasing powers of Danes are increasing."

Denmark's central Bank released its September report

Its GDP forecasts for the years 2025-2027 are lower than expected due to a weaker pharmaceutical industry and a negative impact of U.S. tariffs.

(source: Reuters)