New Global Recession “Could Push Jobless Figure Over 200,000”

13-08-2010 15:25 Any further slowdown in the global economy could lead to a sharp rise in the Danish unemployment rate, new figures released by the Central Bank (Nationalbanken) show. According to the bank, a modest slowdown in Danish growth could send unemployment up over 200,000. This figure could rise to 300,000 if global growth also stagnates. The jobless total stands at 114.000 today

While analysts at Nordea and Jyske Bank have downplayed the chances of a “double dip” recession, economists at the OECD and the US Federal Reserve have been more cautious in recent days. The Fed’s decision to downgrade its growth expectations for the U.S. economy last week has led to heightened debate over how the global economy will develop.

In a number of risk scenarios for the Danish economy, the Central Bank warns that even a mild downturn could lead to zero growth and thus send unemployment up to 200,000. If disappointing Danish growth coincided with an unexpected decline in the global economy, the bank warns, unemployment could rise above 300,000.

Danish Bank Chief Economist Steen Bocian agreed that the risk of a second global downturn should not be underestimated. "We should be aware of the risk that the Danish economy could evolve in a different way to what we expect,” he told Borsen.