Denmark releases latest 2008 growth figures

Denmark’s revised budget for 2008 was released on Tuesday and predicted high surpluses for the year and improved levels of annual economic growth, reports Reuters.

According to the Danish Finance Ministry, the revised draft of the budget will increase levels of economic growth by 0.2 per cent of GDP. In the first draft of the budget, released last August, higher levels of public spending led to a prediction of 0.3 per cent increase in economic growth.

Lars Rasmussen, Denmark’s Finance Minister said that Denmark would be able to remain strong even in the face of the global credit crisis because of its remarkably low levels of unemployment and strong public finances. That said, the Denmark needed to proceed with caution, the minister said.

“We are driving right on the edge and that’s why it’s important to keep a tight hold of the steering wheel. That’s why we are easing off the accelerator and freezing 1 percent of the ministries’ budgets this year,” Rasmussen said in a news conference on the budget.

The first draft of the budget was not taken up because of parliamentary elections which took place in November last year.

According to Jacob Grave, the chief economist for Sydbank, “We believe the government’s fiscal tightening is primarily symbolic and should be seen first and foremost as signal politics ahead of the conclusion of the public sector wage round.”

“Economically it doesn’t affect the risk of overheating in Denmark but signals to the wage negotiators that ‘we’ve done something, now it’s your turn’,” he said.