Business Monitor International


Denmark Country Risk Report

Published 19 November 2014 | Quarterly

  • 27 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Denmark Country Risk Report

Core Views 

  • Although Denmark is not part of the eurozone monetary union, its deep financial and trade links have been strengthened by its pegged exchange rate regime, leaving its open economy dependent on eurozone demand and significantly exposed to any flare up of the eurozone debt crisis.

  • A burst housing bubble and subsequent bank failures have made Denmark a Nordic underperformer, and the after-effects will continue to weigh on growth in the medium term. Although Denmark is in the process of staging a broad based economic recovery, the outlook remains dependent stable external demand and a sustained recovery in house prices.

  • Denmark's regional relative safe haven status faces few imminent risks given favourable public debt dynamics and stable fixed currency regime. However, this inflow of capital has masked structural economic problems, and should investors start leaving the country it could expose an array of problems, most problematic of which could be a rise in interest rates and drop in house prices.

  • The government of Denmark has repeatedly expressed its commitment to its pegged currency regime, confirming our view that the country will not join the eurozone in the next decade.

  • The public sector will remain one of the largest in Europe for the foreseeable future, as Denmark's deeply ingrained welfare model remains broadly popular. However, gradual reforms are likely to continue in the coming years that scale back benefit programs and reduce the tax burdens.

  • Although we expect public expenditure to remain elevated, the government's substantial tax revenues will enable it to keep deficit and debt levels on a sustainable trajectory.

Major Forecast Changes 

  • No Major Forecast Changes

Risks To Outlook 

  • A major risk to Denmark's medium-term macroeconomic trajectory stems from ongoing economic and financial developments within the eurozone. Denmark has sizeable trade and investment linkages with the common currency bloc, and a major...

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Operational Risk Index Highlights Key Vulnerabilities
8
Table: POLITICAL OVERVIEW
8
Table: Operational Risk Index & Sub-Components
9
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Index
11
Economic Activity
12
Regional Headwinds Dampen Growth Outlook
12
Table: GDP By Expenditure
12
Chapter 3: Key Sectors
15
Oil & Gas
15
Table: Oil Production (2012-2017)
15
Table: Oil Production (2018-2023)
16
Table: Gas Production (2012-2017)
18
Table: Gas Production (2018-2023)
18
Other Key Sectors
21
table: Pharma Sector Key Indicators
21
table: Telecoms Sector Key Indicators
21
table: Infrastructure Sector Key Indicators
21
table: Food and Drink Sector Key Indicators
22
table: Autos Sector Key Indicators
22
Chapter 4: BMI Global Assumptions
23
Global Outlook
23
Reality Check: Uncertainty Reigns
23
Table: Global Assumptions
23
Table: Developed States, Real GDP GrowtH, %
24
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
24
Table: Emerging Markets, Real GDP Growth, %
25

The Denmark Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Denmark. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Denmark's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Denmark's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Denmark's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Denmark, including currency volatility, the commodity price boom and protectionist policies.

The Denmark Country Risk Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Operational Risk and Key Sector Outlook.

Economic Outlook:

How will the Denmark' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Denmark through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Denmark Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Denmark and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Denmark, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Denmark over the next 5-years?

BMI's Denmark country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Denmark Market - Political Strengths, Weaknesses, Opportunities and Threats facing Denmark.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Denmark's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Denmark’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Denmark's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Denmark?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Denmark against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Denmark’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

Key Sector Outlook*

Which industry sectors in Denmark will grow fastest, and where are the major investment opportunities in the market?

BMI identifies investment opportunities in Denmark's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry, including recent sector developments and major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2015-2019, using BMI's proprietary industry modelling technique, which incorporates key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across and within each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express