1 Denmark Country Profile
Total Page:16
File Type:pdf, Size:1020Kb
Denmark Country Profile Denmark Country Profile Politics Economy Trade & Industries General Profile Total area 43,094 sq km Population 5,543,453 (July 2012 est.) 2007 2008 2009 2010 2011 Growth Population World (in Billion) YoY 6.6 6.7 6.8 6.9 7.0 1% Government type constitutional monarchy Queen MARGRETHE II (since 14 January 1972); Heir Chief of state Apparent Crown Prince FREDERIK, elder son of the monarch (born on 26 May 1968) Prime Minister Helle THORNING-SCHMIDT (since 3 October Head of government 2011) Capital Copenhagen temperate; humid and overcast; mild, windy winters and Climate cool summers Danish, Faroese, Greenlandic (an Inuit dialect), German Language (small minority) Major City COPENHAGEN (capital) 1.174 million (2009) Economy Profile 2009 2010 2011 World GDP Real Growth -0.8% 5% 3.6% World GDP (in Trillions) 58.1 63.3 70.2 Denmark GDP Growth -5.8% (2009 est.) 1.3% (2010 est.) 1% (2011 est.) GDP $330.5 billion (2011 est.) GDP – Per capita $40,200 (2011 est.) agriculture: 4.5%; industry: 19.1%; services: 76.4% (2011 GDP – Composition by sector est.) Profile General Inflation 2.8% (2011 est.) Exchanges Rates 5.291 (2011 est.) Danish kroner (DKK) per US dollar Primary Economy Sector Manufacturing; Chemicals; Electricity, Coal, Gas, and Oil; Chapter: 1 Cosntruction; Tourism; Wholesale and Retail Trade; Telecommunications; Financial Services; Transportation Unemployment Rate 6% (2011 est.) Economy Profile Economy Chapter: Chapter: 2 Aalborg, Aarhus, Copenhagen, Ensted, Esbjerg, Fredericia, Ports and Terminals Kalundborg percent of vote by party - Liberal Party 26.7%, Social Democrats 24.9%, Danish People's Party 12.3%, Social Liberal Party 9.5%, Socialist People's Party 9.2%, Unity List 6.7%, Liberal Alliance 5%, Conservative People's Party 4.9%, other 0.8%; seats by party - Election results Liberal Party 47, Social Democrats 44, Danish People's Party 22, Social Liberal Party 17, Socialist People's Party 16, Unity List 12, Liberal Alliance 9, Conservative People's Party 8; note - does not include the two seats from Greenland and the two seats from the Faroe Islands Min. of Agriculture, Food, & Fisheries : Mette GJERSKOV Min. of Business Affairs & Growth : Ole SOHN Min. of Children & Education : Christine ANTORINI Min. of Climate, Energy, & Construction : Martin LIDEGAARD Min. of Cultural Affairs : Uffe ELBAEK Min. of Defense : Nick HAEKKERUP Min. for Development Cooperation : Christian Friis BACH Min. of Ecclesiastical Affairs : Manu SAREEN Min. of Economic Affairs : Margrethe VESTAGER Min. of Employment : Mette FREDERIKSEN Min. of Environment : Ida AUKEN Min. of Equality : Manu SAREEN Min. of European Cooperation : Nicolai WAMMEN Ministry Name Min. of Finance : Bjarne CORYDON Min. of Foreign Affairs : Villy SOVNDAL Min. of Health & Prevention : Astrid KRAG Min. of Interior Affairs : Margrethe VESTAGER Min. of Justice : Morten BODSKOV Min. of Nordic Cooperation : Manu SAREEN Min. of Research, Innovation, & Continuing Education : Morten OSTERGAARD Min. of Social Affairs & Integration : Karen HAEKKERUP Min. of Taxation : Thor Moger PEDERSEN Min. of Towns, Housing, & Rural Affairs : Carsten HANSEN Min. of Trade & Investment : Pia Olsen DYHR Min. of Transport : Henrik Dam KRISTENSEN Danish People's Party (Dansk Folkeparti) or DF [Pia KJAERSGAARD]; Liberal Alliance or LA [Anders SAMUELSEN]; Liberal Party (Venstre) or V [Lars LOKKE RAMUSSEN]; Red-Green Alliance (Enhedslisten) Political parties and [collective leadership, spokesperson Johanne SCHMIDT-NIELSEN]; leaders Social Democratic Party (Socialdemokratiet) or SDP [Helle THORNING-SCHMIDT]; Social Liberal Party (Det Radicale Venstre) or SLP [Margrethe VESTAGER]; Socialist People's Party (Socialistisk Folkeparti) or SF [Villy SOVNDAL] Terminals Ports and Denmark Economy This thoroughly modern market economy features a high-tech Characteristics agricultural sector, state-of-the-art industry with world-leading Chapter: Chapter: 3 firms in pharmaceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a member of the European Union (EU); Danish legislation and regulations conform to EU standards on almost all issues. Danes enjoy among the highest standards of living in the world and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. Denmark is a net exporter of food and energy and enjoys a comfortable balance of payments surplus but depends on imports of raw materials for the manufacturing sector. Within the EU, Denmark is among the strongest supporters of trade liberalization. After a long consumption-driven upswing, Denmark's economy began slowing in 2007 with the end of a housing boom. Housing prices dropped markedly in 2008-09 and, following a short respite in 2010, continued to decline in 2011 though at a slower pace. The global financial crisis has exacerbated this cyclical slowdown through increased borrowing costs and lower export demand, consumer confidence, and investment. The global financial crises cut Danish real GDP by 0.8% in 2008 and 5.8% in 2009. Denmark made a modest recovery in 2010 with real GDP growth of 1.3%, in part because of increased government spending; however, the country experienced a technical recession in late 2010-early 2011. Historically low levels of unemployment rose sharply with the recession and have remained at about 6% in 2010-11, based on the national measure, about two-thirds average EU unemployment. An impending decline in the ratio of workers to retirees will be a major long-term issue. Denmark maintained a healthy budget surplus for many years up to 2008, but the budget balance swung into deficit in 2009. In spite of the deficits, the new coalition government plans to deliver a modest stimulus to the economy in 2012. Nonetheless, Denmark's fiscal position remains among the strongest in the EU at 46.5% of GDP in 2011. Despite previously meeting the criteria to join the European Economic and Monetary Union (EMU), so far Denmark has decided not to join, although the Danish krone remains pegged to the euro. Denmark held the EU presidency during the first half of 2012; priorities included promoting a responsible, dynamic, green, and safe Europe, while working to steer Europe out of its euro zone economic crisis. Denmark Economy Characteristics Economy Denmark Chapter: Chapter: 4 The monetary-policy counterparties' aggregate accounts with Danmarks Nationalbank in relation to monetary policy are stated on Danmarks Nationalbank's balance sheet and are termed the "net position" vis-à-vis Danmarks Nationalbank. Danmarks Nationalbank makes available two facilities that give the monetary-policy counterparties the opportunity to earn interest on their net position: Firstly, the counterparties have access to make current-account deposits with Danmarks Nationalbank within certain limits. The current account may not be overdrawn overnight. Current- account deposits accrue interest at the current-account rate. Secondly, Danmarks Nationalbank conducts market operations whereby the counterparties can borrow or place funds, usually for 14 days. Danmarks Nationalbank conducts its market operations by purchasing and selling certificates of deposit or by lending against collateral in the form of securities. The lending rate is equal to the rate of interest for certificates of deposit, and usually there is no limit to the amounts that the counterparties may borrow or place. The key liquidity concept in monetary policy is the counterparties' current-account deposits, since these funds can immediately be used as means of payment at the initiative of the account holders themselves. Current-account deposits are therefore often referred Bank and Moneter Policy to as "liquidity", "current-account liquidity" or "krone liquidity". Overall, the monetary-policy counterparties do not have access to more liquidity than has been provided via Danmarks Nationalbank. The counterparties may trade liquidity with each other, but cannot themselves create liquidity. Since the counterparties may not have overdrafts on their current accounts at the close of the day, Danmarks Nationalbank provides liquidity if all counterparties taken as one show a liquidity deficit. This might be necessary if Danmarks Nationalbank's sale of foreign exchange (and purchase of kroner), or the private sector's payments to the central government, lead to an aggregate liquidity deficit. Danmarks Nationalbank will always – via its market operations – ensure that the aggregate current-account funds are sufficient to prevent overdrafts at the close of the day. On the other hand, if the total limit for current-account deposits is reached, Danmarks Nationalbank will issue certificates of deposit. Danmarks Nationalbank conducts monetary policy by setting the monetary-policy interest rates, i.e. the discount rate, the current- account rate and the lending rate (equal to the rate of interest for certificates of deposit). The interest rates are determined by the Policy Moneter and Bank Board of Governors of Danmarks Nationalbank, and can be changed as required at any time. Chapter: Chapter: 5 Danmarks Nationalbank's interest rates guide the short-term money-market interest rates in Denmark, cf. Chart 1.1. As a resultofthecompetition among the banks in the long term, changes to the banks' deposit and lending rates tend to match larger changes to the discount rate relatively closely, cf. Chart 1.2. This reflects that borrowing from Danmarks Nationalbank or via the