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*[http://www.imf.org/ IMF Country Report] |
*[http://www.imf.org/ IMF Country Report] |
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*[http://www.state.gov/r/pa/ei/bgn/3167.htm Bureau of Public Affairs, U.S. Department of State, country overview for Denmark] |
*[http://www.state.gov/r/pa/ei/bgn/3167.htm Bureau of Public Affairs, U.S. Department of State, country overview for Denmark] |
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*[http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=denmark/&btnG= |
*[http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=denmark/&btnG=Search Google news Denmark] |
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{{EU countries}} |
{{EU countries}} |
Revision as of 11:31, 26 January 2008
File:DanishKroners.jpg | |
Currency | Danish krone (DKK, kr) |
---|---|
calendar year | |
Trade organisations | EU, OSCE, WTO, OECD and others |
Statistics | |
GDP | $201.5 billion (2006 est.) |
GDP growth | 3.5% (2006 est.) |
GDP per capita | $37,000 (2006 est.) |
GDP by sector | agriculture: 2.6%, industry: 25.6%, services: 71.8% (2006 est.) |
1.7% (2007)2.3% (December 2007)[1] | |
Population below poverty line | N/A |
Labour force | 2.91 million (2006 est.) |
Labour force by occupation | agriculture: 3%, industry: 21%, services: 76% (2004 est.) |
Unemployment | 2.7% (2007)[2] |
Main industries | petroleum and gas, iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture and other wood products, shipbuilding and refurbishment, windmills, pharmaceuticals, medical equipment |
External | |
Exports | $93.93 billion (2006 est.) |
Export goods | machinery and instruments, meat and meat products, dairy products, fish, pharmaceuticals, fashion apparel, furniture, windmills, Christmas trees, potted plants, mink and fox skin, salt, various specialty niche products |
Main export partners | Germany 16.8%, Sweden 14.2%, UK 9.0%, US 6.7%, Norway 5.7% France 5.5%, Netherlands 5.3%, EU 69.6% (2006) |
Imports | $89.32 billion (2006 est.) |
Import goods | machinery and equipment, raw materials and semimanufactures for industry, chemicals, grain and foodstuffs, consumer goods |
Main import partners | Germany 21.5%, Sweden 14.3%, Netherlands 6.5%, UK 5.8%, China 5.2%, Norway 4.6% France 4.2%, Italy 4.1%, EU 72.6% (2006) |
Public finances | |
28.1% of GDP (2006 est.) | |
Revenues | $147 billion (2006 est.) |
Expenses | $138.9 billion (2006 est.) |
Economic aid | ODA, $2.13 billion (2005) |
All values, unless otherwise stated, are in US dollars. |
Denmark has a small, open, and flexible economy. Because of its high employment costs for labor, US$39.29 per hour worked for a production worker - the world's highest, slightly more than in Norway (US$39.15) - the manufacturing sector is skill or knowledge intensive, and decreasingly labor intensive.[3] The service sector makes up the vast amount of the employment and economy. Its industrialized market economy depends on imported raw materials and foreign trade. Within the European Union, Denmark advocates a liberal trade policy. Its standard of living is among the highest - and for many years the most equally distributed as shown by the Gini coefficient - in the world, and the Danes devote 0.8% of Gross National Income (GNI) to foreign aid. It is a society based on consensus (compromise) with the Danish Confederation of Trade Unions and the Confederation of Danish Employers in 1899 in Septemberforliget (The September Settlement) recognizing each others' right to organize and thus negotiate.[4]The employers' right to hire and fire their employees whenever they find it necessary is recognized.
Denmark is self-sufficient in energy - producing oil, natural gas, wind- and bio-energy. Its principal exports are machinery, instruments and food products. The U.S. is Denmark's largest non-European trading partner, accounting for around 5% of total Danish merchandise trade. Aircraft, computers, machinery, and instruments are among the major U.S. exports to Denmark. There are several hundred U.S.-owned companies in Denmark, some of them just registered for tax purposes, which is beneficial for holding companies. Among major Danish exports to the U.S. are industrial machinery, chemical products, furniture, pharmaceuticals, and canned ham and pork.
From 1982, a center-right government corrected accumulated economic imbalances, mainly inflation and balance-of-payments deficits, but lost power in 1993 to a Social Democratic coalition government led by Poul Nyrup Rasmussen, which remained in office following the March 1998 election. During the governments of Poul Nyrup Rasmussen, there was a drastic fall in official unemployment, which peaked at 12.4% (1993)- and at 13.8% in January 1994 (386,186 persons) - was 5.2% in 2001 and is (December 2007) 2.7%. This is the lowest level since the beginning of the 1970's, making up 74.900 persons, a reduction by 60% - 112,800 persons, on average 2,400 per month - since December 2003.[2] Inflation fell from 1.9% in 2006 to 1.7% in 2007 and was 2.3% in December 2007.[1]Average annual growth rates are now 2-3.5%. In November 2001, a center-right government led by Anders Fogh Rasmussen won the election on maintaining the current tax level, improving efficiency in the public administration and decreasing the number of immigrants and asylumseekers.
Welfare state
Denmark has a highly developed welfare safety net, which ensures that all Danes receive free health care and need not fear real poverty. More than one-quarter of the labor force is employed in the public sector. Thus around 60% of the adult population in Denmark is either dependent on transfer payments, i.e. entitlement benefits, or is employed by government at central, regional or local level (2005). In 2007, according to TV2 (Denmark), January 20, 2008, around 700,000 in the working age group were dependent on entitlement benefits, often lacking in working experience and/or skills. However, as of December 2007 only 2.7% (74,900) of Danes are officially unemployed. Denmark has placed number one in the European pensions barometer survey for the past two years.[5]Remarkable is that the lowest-income group before retirement from the age of 65 receive 120% of their pre-retirement income in pension and miscellaneous subsidies.
The large public sector is financed by high taxes. A Value added tax of 25% is levied on the sale of most goods and services (including groceries). The income tax in Denmark ranges from 9%-44% for ultra-low to low-income families to 44%-63% progressively for middle class families. 850,000 Danes (31% of everyone employed and 44% of all full-time employees) pay a marginal income tax of 63%. The number of Danes paying a marginal income tax of 63% in 2006 is expected to be 925,000.
Tax Burden and Employment
With a GDP of 1,642,215 million DKK and revenue from taxes and ownership at 803,693 million DKK (2006)[6], 49.07% of GDP, it is of extreme importance what happens in the tax-financed part of the economy. It is estimated that the tax burden in Denmark in 2008 will amount to 47.7% of GDP, second only to Sweden at 48%. This figure does not include income from ownership.[7] Public sector employment (full-time and part-time) has been relatively steady at more than 800,000 a year this first decade, making up around 28% of total employment, whereas private sector employment has risen by over 300,000 since the 1990's to slightly over 2 million in 2007 (full-time and part-time).[8]With the information based partly on payments to the Arbejdsmarkedets Tillægspension pension fund of all employees and insured but unemployed members of an unemployment fund in Denmark, full-time employment is calculated at over 2.3 million persons in the third quarter of 2007. The increase in the third quarter from a year ago in the number of employed persons was 1.6% and the amount of hours worked was 3.2% higher.[9]Productivity increased at an average of 2.3% a year in 2004, 2005 and 2006, recently being revised upward from an average of just 0.9% and with a too high employment level estimated.[10] The upward revision is good, because a high wage economy like Denmark with very few valuable natural resources needs to be highly productive, or efficient, and innovative to compete with other countries for a market share in the global economy.
Public Sector Reform
To gain synergies through economies of scale (greater professional and financial sustainability) and big item discounts and to offer a wider array of services closer to the public (be a one-stop place of access to the public sector not unlike the unitary councils), it was deemed necessary to merge the municipalities and other administrative entities in the public sector. This would also help alleviate the financial problems of depopulation due to limited job opportunities, high unemployment and aging and make introduction of new information technology more affordable[11] From 1 January 2007, the new center-right government streamlined the public sector extensively by decreasing the number of administrative units drastically in the different tiers of government, i.e. in the number of city court circuits (from 82 to 24), police districts (from 54 to 12)[12], tax districts (before 2007 the responsibility of the municipalities;after that part of the central government Ministry of Taxation), reshuffling tasks among the three government levels and abolished the counties in Kommunalreformen ("The Municipal Reform" of 2007), thereby reducing the number of local and regional politicians by almost half to 2,522 (municipal councillors) (council elections November 2005) (1978: 4,735;1998: 4,685; reduced somewhat in council elections November 2001 (Bornholm)) and 205 (regional councillors) (1998: 374)[13] respectively. Before 1970 (a previous reform in effect from 1 April that year) the number of councillors (both categories) was around 11,000[14]in around 1,000 parish municipalities (sognekommuner), being supervised by their county, and market city municipalities (købstadskommuner), the latter numbering 76 and not being part of a county but being supervised by the Interior Ministry. This distinction (having independent municipalities) ending (except for Copenhagen, Frederiksberg and Bornholm (2003-06)) with the reform of 1970, the term municipality (kommune) replaced the previous two terms, which are now never used except for historical purposes. The number of municipalities had been reduced when during the period from April 1962 to 1966 398 municipalities merged to form 118 voluntarily. The number of municipalities peaked in the 1930's and was 1386 in 1962.[15] Many of the 275 municipalities after 1970 built large city halls to consolidate the administration and thus changed the cityscape of Denmark and also consolidated other municipal enterprises and the purchase of goods and services from the private sector, as will some of the present 98 municipalities over time.TV2(Denmark) reported 24 September 2007, that SKI, a mutual purchasing service company for central government, regions, and municipalities, made purchases of 140 billion DKK (almost 9% of GDP) of goods and services in bulk every year, prompting private companies to complain over razorthin profit margins and that for instance innovative (but expensive) products and energy efficiency sometimes were better than a very low price.
Greenland and the Faroe Islands
- Main articles: Economy of the Faroe Islands and Economy of Greenland
Greenland suffered negative economic growth in the early 1990s, but since 1993 the economy has improved. A tight fiscal policy by the Greenland Home Rule Government since the late 1980s helped create a low inflation rate and surpluses in the public budget, but at the cost of rising foreign debt in the Home Rule Government's commercial entities. Since 1990, Greenland has registered a foreign trade deficit.
Following the closure of Greenland's last lead and zinc mine in 1989, Greenland's economy is solely dependent on the fishing industry and financial transfers from the Danish central government. Despite resumption of several interesting hydrocarbon and mineral exploration activities, it will take several years before production will begin. Greenland's shrimp fishery is by far the largest source of income, since cod catches have dropped to historically low levels. Tourism is the only sector offering any near-term potential, and even this is limited due to the short season and high costs. The public sector plays a dominant role in Greenland's economy. Grants from mainland Denmark and EU fisheries payments make up about one-half of the home-rule government's revenues.
The Faroe Islands also depend almost entirely on fisheries and related exports. Without Danish Government bailouts in 1992 and 1993, the Faroese economy would have gone bankrupt. Since 1995, the Faroese economy has seen a noticeable upturn, but remains extremely vulnerable. Recent off-shore oil finds close to the Faroese area give hope for Faroese deposits, too, which may form the basis for an economic rebound over the longer term.
Economy - overview
This thoroughly modern market economy features high-tech agriculture, up-to-date small-scale and corporate industry, extensive government welfare measures, comfortable living standards, and high dependence on foreign trade. Denmark is a net exporter of food. The center-left coalition government (1993-2001) concentrated on reducing the unemployment rate and turning the budget deficit into a surplus, as well as following the previous government's policies of maintaining low inflation and a current account surplus. The coalition also committed itself to maintaining a stable currency. The coalition lowered marginal income tax rates while maintaining overall tax revenues; boosted industrial competitiveness through labor market and tax reforms, increased research and development funds. The availability and duration of dagpenge (a form of unemployment benefit) has been restricted and because of rapidly rising prices on housing this has led to an increase in poverty from below 4% in 1995 to 5% in 2006 according to the Danish Economic Council [5]. Despite these cuts the public sector in Denmark has risen from 25.5% of GDP during the former government to 26% today and is projected to be at 26.5% in 2015 if current policies continue [6].
Denmark chose not to join the 11 other European Union members who launched the euro on 1 January 1999. Especially from 2006, economists and political pundits have expressed concern that the lack of skilled labor will result in higher pay increases and an overheating of the economy, which would repeat the boom-and-bust cycle in 1986, when government introduced a tax reform and restricted the private loan market because of a record balance-of-payments deficit. As a consequence, the trade balance showed a surplus in 1987, and the balance-of-payments in 1990 (first surplus since 1963). They have remained in surplus since, except for the balance of payments in 1998.
GDP
Table showing selected PPP GDPs and growth - 2002 to 2006 est.:
Year | GDP in billions of USD PPP |
% GDP Growth |
---|---|---|
2002 | 166.876 | 0.5 |
2003 | 170.798 | 0.7 |
2004 | 178.477 | 2.4 |
2005 | 187.721 | 3.1 |
2006 | 195.581 | 3.2 |
See also
Footnotes
- ^ a b Template:Da icon"Lidt lavere prisstigninger i 2007 end året før" (PDF). Statistics Denmark.
- ^ a b Template:Da icon"Ledigheden faldt til 2,7 pct" (PDF). Statistics Denmark.
- ^ The Economist:Pocket World in Figures.2008 Edition.Page 64.
- ^ Flexicurity
- ^ [1]2007European Pensions Barometer.
- ^ http://www.statistikbanken.dk tables NAT01 + OFF12
- ^ Template:Da icon[2]Børsen business daily:Tax burden almost in first place
- ^ Template:Da iconDanske Bank:Nordisk/Skandinavisk økonomi, different editions.
- ^ Template:Da iconØget privat og offentlig beskæftigelseStatistikbanken.dk Tables BESK 11+12+13
- ^ Template:Da iconMarkant opjustering af dansk produktivitetsvækst (17. januar 2008)
- ^ Template:Da iconhttp://www.dr.dk/mitdanmark/da/forside/ A TV series on the municipal reform.
- ^ Template:Da icon[3] New police districts and local court circuits with links to maps
- ^ Template:Da iconDen Store Danske Encyklopædi + Supplement 2, "kommunalvalg". Gyldendal. 1994 + 2006. ISBN 87-7789-045-0 and ISBN 87-0204-192-8 Councillors
- ^ Template:Da iconOve Hansen: Sådan styres kommunen. AOF/Fremad. 1978. ISBN 87-7403-131-7 Number of councillors
- ^ Template:Da icon[4] The local administration 1660-2007; Historiske kort (History maps); Vælg et årstal (Select a year).
References
- Press release Statistics Denmark August 2007:Electronic publications become free of chargeTemplate:Da icon
- Statistics Denmark Statistics free of charge
- Statistical Yearbook 2007 PDF-files free of charge
- Central Bank
- Confederation of Danish Employers
- Landsorganisationen i Danmark The Danish Confederation of Trade Unions
- Anvendt Kommunal Forskning Danish Institute of Governmental Research
- The Danish National Centre for Social Research
- De økonomiske Råds sekretariat Danish Economic Councils
- Economic Council of the Labour Movement
- CEPOS Think Tank for a liberal economy and limited Government etc.
- Economic History Services Encyclopedia: Denmark