Denmark recorded its biggest economic contraction because the global pandemic amid a setback in drug production, showing how dependent the Scandinavian country has grow to be on its drug industry.
Gross domestic product fell 1.8% in comparison with the previous three months, the sharpest decline in almost 4 years, Statistics Denmark said said on Tuesday in a preliminary reading. The decline was resulting from a decline in industry and transportation, the agency said.
The data underscores how dependent Denmark has grow to be on its drugmakers, including Novo Nordisk A/S, for economic growth, with quarterly fluctuations in supplies affecting the economy. Just last week, the Danish government behaved Its growth forecast for 2024, which cites Novo and other pharmaceutical firms as key growth drivers, expects exports and investment in construction and engineering to be boosted.
However, these growth prospects haven’t yet materialized in pharmaceutical production fall 12.2% over the quarter, based on data from earlier this month, although economists say that is probably going temporary. Tore Stramer, chief economist on the Danish Chamber of Commerce, said on Tuesday that first-quarter GDP was hit by a decline in pharmaceutical production of an “extraordinarily high level” and was “probably both technical and practical in nature.”
“This should not be seen as an expression that the Danish economy has been hit by a major slowdown,” Stramer said. “As we look ahead, there is certainly no sign that we are facing a turnaround in production in the pharmaceutical sector; on the contrary, the arrow points strongly upwards.”
According to Statistics Denmark, Danish GDP in the primary quarter was also hit by a decline in automotive sales and repair exports, driven by rising freight rates in sea transport.
