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Denmark's Economy May Decline By Up To 6% in 2020, Says Finance Ministry

Denmark's economy could shrink by between 3% and 6% this year as the country's businesses struggles with the effects of a lockdown to limit the spread of the new coronavirus, finance minister Nikolai Wammen has said.

The minister also said the government will offers loans to small and medium size businesses worth up to 35 billion Danish crowns.

"We are facing a hard hit to the Danish economy," Wammen said at a news conference. "The second quarter of this year is likely to be one of the darkest chapters in Denmark's economic history."

Last week the Danish central bank forecast a contraction of between 3% and 10% this year, depending on the depth and length of the crisis, with its main scenario being a 5% contraction.

Targeted Investments

The minister said the economic recovery in Denmark would need "long-term" and "wise" government investments, and said this was a unique opportunity to make it a 'green' recovery.

Denmark, the cradle of wind power, is viewed as a pioneer with regards to climate change in particular its ambitious target of a 70% greenhouse gas reduction by 2030.

"We face a climate challenge, which hasn't disappeared because the coronavirus has hit us," Wammen said.

"As we lift our climate ambitions, we also support Danish jobs and business. We need to seize that opportunity," he said, adding renovation of social housing and improvement of infrastructure as possible other investments.

Denmark, which was one of the first European countries to announce a lockdown, has reported 218 coronavirus-related deaths, but has seen the number of hospitalizations of corona patients fall over the past week.

News by ReutersClick subscribe to sign up to ESM: European Supermarket Magazine.

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