IMF Staff Country Reports

The 2024 Article IV Consultation highlights that The Danish economy has continued to expand at a robust pace, driven by an exceptional surge in the pharmaceutical. In contrast, the rest of the economy has remained relatively subdued, aside from the maritime and information and communication technology industries, reflecting sluggish demand. Meanwhile, with a decline in global energy prices and lacklustre domestic demand, inflationary pressures have largely dissipated in recent months. The policy priority is to manage fiscal policy in a manner consistent with near-term cyclical conditions while taking account of long-term spending pressures without risking fiscal sustainability. Other priorities include ensuring financial stability and pursuing structural reforms to lift potential growth and achieve climate goals. The financial system remains sound, but risks remain. Continued reform efforts are necessary to boost labor supply and enhance productivity, aiming to sustain the welfare state. Reform priorities include enhancing work incentives, addressing skill mismatches by accepting more foreign talent, modernizing active labor market policies, and enhancing education outcomes for children with immigrant backgrounds. Further actions are necessary to achieve climate mitigation targets and prepare for climate change.