Danish government deficit will decrease modestly in 2011

24-08-2010 11:17 The government’s new data for the Danish economy show that the budget deficit will amount to DKK 78.7 billion in 2011, the news agency Ritzau wrote. The unemployment is expected to decrease. This means that we may expect a modest decrease of the budget deficit from 2010 to 2011, as the government now adjusts its expectations for this year’s deficit downwards from previously DKK 88.2 billion to DKK 80.1 billion.
The Ministry of Finance said Monday night that the borrowing requirements will increase in 2011. This year the borrowing requirements increase to DKK 113 billlion rising to DKK 142 billion in 2011.

For this year the budget deficit is expected to be 4.6 per cent of the GNP falling to 4.4 per cent in 2011. This means that Denmark approaches the EU requirement of a budget deficit of 3.0 per cent of GNP – but the development is slow. The bank Nordea sees the budget and the new economic review as the first step towards an economic shake-up after the crisis. »We believe that the government here provides a realistic estimate of the coming year’s development of Danish economy which does not differ much from Nordea’s estimate.
Thus the government refrains from drawing a too rosy picture of the prospects for Danish economy, which is a good starting point for implementing the necessary restraints of the public budgets,« Helge J. Pedersen, chief economist at Nordea, wrote today.
»We expect that the election year 2011 will show a modest increase of the public spending of 0.5 per cent. As far as 2012 is concerned we see good chances of a small decrease, when the growth in the global economy really speeds up, Helge J. Pedersen wrote.