Denmark

In-depth country-focused analysis on Denmark's economic, political and operational risk environment, complemented by detailed sector insight

Denmark

Our comprehensive assessment of Denmark's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Denmark, as well as the latest industry developments that could impact Denmark's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Denmark before your competitors.

Country Risk

Denmark Country Risk

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Core Views

  • Real GDP growth in Denmark will continue to be driven by domestic consumption, which will offset external headwinds to a large degree. However, the large debt burden of the private sector will restrain growth over a multi-year horizon.

  • We retain the view that the government will remain unstable. The one-party Liberal minority government will have a difficult time passing legislation, making it likely that the government will be ousted before its term ends in 2019.

  • There is a high probability that Denmark will seek a renegotiation with the European Union over its terms of membership in the bloc following the UK's vote in June 2016 to leave the union. In any event, eurosceptic parties will continue to press for reform, increasing political instability.

Major Forecast...

Denmark Industry Coverage (13)

Autos

Denmark Autos

BMI View:

BMI View : This quarter, we have slightly revised up our 2016 new vehicle sales forecast for Denmark. We now expect 8.9% growth for the sector as a whole, with commercial vehicles to outperform passenger cars.

Passenger Car and Light Commercial Vehicle Sales
(2014-2020)
f = BMI forecast. Source: Statbank Denmark, BMI

Key Views

  • Attractive auto financing rates and strong pent-up demand for new vehicles continue to drive the...

Commercial Banking

Denmark Commercial Banking

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...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Food & Drink

Denmark Food & Drink

BMI View:

BMI View: A consumer base with some of the strongest purchasing power in the world, combined with a favourable business and regulatory environment, will continue to be an attractive characteristic for food and drink companies operating in Scandinavia. That said, market concentration and a weak demographic outlook will limit growth for new entrants.

Latest Updates & Industry Developments

  • Throughout our forecast period to 2020, household spending will experience healthy growth in the Nordics, given...

Infrastructure

Denmark Infrastructure

BMI View:

BMI View: The Danish construction sector will no longer be a regional outperformer in the medium term, due to a weak economic picture. However, investment in the infrastructure sector will drive a solid project pipeline. Areas that will particularly benefit from government, EU and institutional investor interest will be the rail sector and renewable energy expansion. In the long term, growth will moderate significantly as key projects finalise.

Latest Updates And Structural Trends

  • We have revised down further our medium-term industry growth outlook due to a constrained economic picture. Annual average growth of 1.5% over 2016-2020, means the...

Insurance

Denmark Insurance

BMI View:

BMI View: Conditions remain broadly favourable in Denmark's insurance sector. Demographics and the introduction of innovative products are boosting sales of health insurance. At a time of low interest rates and volatile financial markets, the life insurers appear to be capturing business from banks and other conduits for organised savings. We look for life and non-life premiums to grow, with downside risks mainly in the non-life segment, from price competition - particularly in the motor vehicle and property insurance sub-sectors. However, there are also macroeconomic risks, in view of downward revisions to our GDP forecasts.

These macroeconomic risks include the fact that citizens' demand for insurance would take a hit across the board, if the country fell into recession, with people of working age likely to favour more liquid savings options, under that eventuality.

...

Medical Devices

Denmark Medical Devices

BMI View:

BMI View: Denmark represents a mature medical device market with above average per capita spending. Cost containment measures will continue to increase pressure to scale back the country's generous welfare system. As such the market will only show low growth with a forecast US dollar CAGR of 1.4% for the 2014-2019 period. Local production is focused on consumables and patient aids, primarily hearing aids, therefore the majority of the market will remain heavily dependent on imports.

Projected Medical Device Market, 2014-2019
Total (USDmn) ...

Oil & Gas

Denmark Oil & Gas

BMI View:

BMI View: Development delays at the Hejre field and the accompanying forecast change will see Denmark become a crude net importer throughout the forecast period. While its status as a gas net exporter is maintained at the moment, we highlight strong downside risk to gas production and exports after Maersk Oil expressed a potential interest in closing the Tyra East and Tyra West fields by 2018.

Headline Forecasts (Denmark 2014-2020)
2014 2015e 2016f ...

Pharmaceuticals & Healthcare

Denmark Pharmaceuticals & Healthcare

BMI View:

BMI View: Despite Denmark's relatively small pharmaceutical market, which is restricted by the government's tough fiscal policies, we believe Denmark will remain an attractive market for drugmakers. The country's ageing population and high per capita spending will ensure demand for innovative medicines remains high. However, like many Western European countries, the increasing pensionable population will contribute to rising healthcare costs, creating the risk of further cost-containment measures from the government.

Headline Expenditure Projections

  • Pharmaceuticals: DKK20.87bn (USD3.75bn) in 2014 to DKK21.30bn (USD3.14bn) in 2015; +2.1% in local currency...

Power

Denmark Power

BMI View:

BMI View: As the Government continues to struggle to identify a solution to its lack of sufficient baseload capacity once nuclear comes offline, our forecasts for the sector remain virtually unchanged. Taking into account positive macroeconomic expectations for the Nordic region as well as sector trends, we continue to expect power consumption growth in 2017. Similarly, we maintain our long-held view that, while growth expectations in the region are improving, economic woes in the eurozone and the implications of the decision of Brexit remain a...

Denmark Power

BMI View:

BMI View: This quarter our fundamental assumptions for Denmark continue to be relevant. Taking into account positive macroeconomic expectations for the Nordic region as well as sector trends, we continue to expect power consumption growth in 2016. Similarly, we maintain our long-held view that, while growth expectations in the region are improving, economic woes in the eurozone remain a major risk factor for the consumption and generation outlook of the country, as more regional instability could undermine their economic activity. Overall we expect thermal energy generation to decline over our forecast period in line with the country's Green energy agenda. We also believe that, as part of its effort to expand cleaner sources of baseload power, the Government will look to boost biomass projects through coal conversions.

Headline Power Forecasts (...

Renewables

Denmark Renewables

BMI View:

BMI View: High retail electricity prices will prompt the Danish government to advocate an austere renewables strategy over the next five years in an attempt to curb steep subsidy costs, weighing on capacity growth. Post-2019, the commissioning of interconnections will add impetus to the deployment of big-ticket projects already in the project pipeline.

Renewables Headline Forecasts (Denmark 2015-2021)
2015e 2016f 2017f 2018f 2019f...

Telecommunications

Denmark Telecommunications

BMI View:

BMI View: Telenor Denmark stopped selling prepaid services on March 31 2016, to focus exclusively on its post-paid services. We believe Telenor's decision to withdraw prepaid services in Denmark is mostly domestic, as it looks to reduce its exposure in the market and improve profitability following the failure of its merger with Telia. However, it also highlights the broader issue of how operators are attempting to maintain their direct relationship with consumers in saturated markets.

Saturated Market Obstructs Growth
Denmark Mobile Market Forecasts
...

Tourism

Denmark Tourism

BMI View:

BMI View: Denmark's tourism industry remains on the small side and the country currently attracts around half the volume of visitors compared to neighbouring Sweden. Visitor numbers are expected to increase over the course of the forecast period through to 2020, as Denmark raises awareness of its many attractions, invests in business travel infrastructureand improves international travel connections. We do note, however, thatthere are growing downside risks due to regional security concerns and the implementation of stricter border controls, particularly along the border with Germany.

Key Forecasts (Denmark 2013-2020)
2013e ...

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