Market Opportunities in Scandinavia
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Market Opportunities in Scandinavia Denmark, Norway, and Sweden 1 | Page CONTENTS DENMARK__________________________________________________________________ _ _ _1 Country Profile & Economic Overview____________________________ __ 3 Trade Overview____________________________________________________________ _ _ 5 Life Sciences___________________________________________________________________ _ 7 Infrastructure_________________________________________________________________ 15 Green Shipping________________________________________________________________ 25 Other Opportunities_________________________________________________________ _29 NORWAY_______________________________________________________________________ _ 30 Country Profile & Economic Overview____________________________________ 30 Trade Overview_______________________________________________________________ 31 Life sciences___________________________________________________________________ 33 Infrastructure_________________________________________________________________ _ 37 Green Shipping________________________________________________________________ _43 Other Opportunities _________________________________________________________ 48 SWEDEN_________________________________________________________________________ 49 Country Profile & Economic Overview____________________________________ _49 Trade Overview_______________________________________________________________ 51 Life Sciences____________________________________________________________________ _53 Infrastructure_________________________________________________________________ __58 Green Shipping________________________________________________________________ __63 Other Opportunities__________________________________________________________ __66 2 | Page DENMARK Country Profile and Economic Overview Denmark is a rich, modern society with state-of- the-art infrastructure and distribution systems, Denmark Country Profile a highly skilled labor force and a central location • Population: 5,581,503 that makes it an excellent distribution point for the Scandinavian, Northern European and Baltic • Median Age: 41.8 years markets. Its highly-competitive service based • Largest City: Copenhagen economy features high employment levels and a • Area: 42,434 sq. km generous social security system. • GDP: $342.4 billion Over the last two decades, Denmark’s economy • GDP Real Growth Rate: 1.1% has experienced overall strong growth, low • GDP per capita (PPP) $44,600 unemployment, low inequality, strong • Inflation rate: 0.6% financials, heavy government involvement, a high degree of economic freedom, and • Unemployment rate: 6.2%* considerable ease of doing business. Since the • Currency: Danish Krone global financial crisis, Denmark’s Source: CIA World Factbook, 2014 est. competitiveness and growth have suffered, but * EuroStat, Sep. 2015 the economy has performed relatively well compared to Europe as a whole. The Danish economy is fundamentally strong. Since the mid-1990s, economic growth rates have averaged close to 3%, the formerly high official unemployment rate stands at 6.2 %, and public finances have been in surplus. Since 1989, Denmark has had a comfortable balance-of-payments current account surplus, corresponding to 5.5% of GDP in 2012.1 Denmark’s standard of living is among the highest in the world with a GDP per capita of $60,634.2 However, competitiveness has deteriorated in the past decade and productivity growth has been weak – only rising one point between 2011 and 2014 – eroding potential economic growth. Moreover, vulnerabilities remain in the financial sector.3 It did not evade the economic malaise that has affected Europe in recent years, with GDP declining slightly in 2012 and 2013 and rising a tepid 1.1% in 2014.4 Growth accelerated in 2015. Denmark’s fiscal position is relatively sound. Though it has deteriorated during the current economic crisis, Denmark entered the crisis in a strong position and the budget deficit has remained moderate both compared to Denmark’s past experience and to other OECD countries.5 In 2014 Denmark had a 1 U.S. Commercial Service: Denmark Economic Overview 2 CIA World Factbook: Denmark 3 U.S. Commercial Service: Denmark Country Commercial Guide 4 Euro Monitor 5 U.S. Commercial Service: Denmark Country Commercial Guide 3 | Page budget surplus of 1.3% of GDP, among the highest in the world. Its public debt of 45% of GDP is likewise among the most favorable ratios among OCED countries. 6 Economic Structure Among OECD countries, Denmark’s economy has among the highest degrees of government involvement. According to a 2013 report by Eurostat, Danes pay the highest taxes among all EU countries,7 with taxes and other revenues accounting for 58.5% of economic output in 2014.8 One quarter of the population is employed in the public sector and 24% of the working-age population relies primarily on government transfer payments. Denmark’s government-intensive “flexicurity” system helps adjust to shocks while limiting the social cost of unemployment and the risk that it could become entrenched. The social welfare system ensures low poverty and low inequality. However, the heavy load of government transfer payments burdens other parts of the system. Health care, other than for acute problems, and care for the elderly and children have particularly suffered. 9 Heavy government involvement has not, however, negatively impacted economic freedom or ease of doing business. Denmark ranks 11th in the world and 4th in Europe on the Heritage Foundation’s 2015 Index of Economic Freedom, receiving particularly high marks for regulatory efficiency, market openness, and rule of law.10 Likewise, the World Bank ranks Denmark 3rd globally on the Doing Business Index, giving it a perfect score on the “trading across borders” criteria.11 Denmark’s thoroughly modern market economy features a high-tech agricultural sector and state-of- the-art industry with world-leading firms in pharmaceuticals, maritime shipping, and renewable energy. Services account for over 77% Denmark’s GDP, a comparable rate with other advanced economies. Major industries include food processing (especially meat and dairy goods), shipbuilding, the manufacture of metals, chemicals, machinery, transportation equipment, textiles, electronics, furniture, wood products, pharmaceuticals, medical equipment and windmills. 12 Economic Forecast Denmark’s economy improved throughout 2015, with real GDP rising an estimated 1.7%.13 Growth is projected at 2.1% for 201614 and at about 1.5% per year for the medium term, with domestic demand and exports being the main drivers. Unemployment has fallen from 6.5% to 6.1% in 2014 and is projected to continue declining modestly. Wage growth remains moderate, which is helping with competitiveness, but productivity growth is sluggish. Long-term unemployment is very low. Even as the population ages, immigration will help drive population growth of about 6.5% by 2030 (0.4% per year). Boosted by high levels of savings and low interest rates, private investment is expected to strengthen. The government is making efforts to further boost corporate investment in part through plans to cut 6 CIA World Factbook: Denmark 7 U.S. Commercial Service: Denmark Economic Overview 8 CIA World Factbook: Denmark 9 U.S. Commercial Service: Denmark Economic Overview 10 Heritage Foundation: 2015 Index of Economic Freedom 11 World Bank: Doing Business Index 12 CIA World Factbook: Denmark 13 Eurostat 14 UK Trade and Investment: Denmark Trade and Export Guide 4 | Page energy taxes through 2020. It plans to introduce tax breaks for start-ups and reductions in dividend taxes to eventually align corporate tax rates with levels in Germany and Sweden to bolster competitiveness. Modest gains in private consumption provide additional support. The real value of private final consumption rose by 0.8% in 2014 and a growth rate of 2.8% is expected for 2015. Although high household debt continues to constrain consumer spending, households are rebuilding balance sheets and net wealth is rising.15 Denmark Trade Overview Denmark is highly dependent on international trade, with exports and imports each equaling approximately one third of GDP in 2014. Its government is a strong advocate for liberal trade policy, and political and commercial relations with the United States are excellent. The United States is Denmark’s top export partner outside of the EU. Denmark’s major imports from the United States are: industrial machinery, capital equipment, computers and telecom products, software, aircraft, and scientific instruments. Other important U.S. exports to Denmark are military equipment, chemicals and pharmaceuticals, tobacco, wine, fresh vegetables, nuts, and forest products. There are more than 500 American subsidiaries established in Denmark and a strong American Chamber of Commerce with approximately 255 members. American-owned firms in Denmark are prominent in information technology (IT) and telecommunications products and services, in biotechnology, and in offshore oil and gas exploration and production. Denmark Imports & Exports (Billions of US$)16 Imports by Country Exports by Country From 2014 %2013- 14 To 2014 %2013- 14 TOTAL 99.3 2.82 TOTAL 110.9 0.73 1 Germany 20.2 0.77 1 Germany 20.0 8.25 2 Sweden 12.2 1.06 2 Sweden 131 -2.40 3 Netherlands 7.6 4.61 3 United Kingdom 8.7 -9.72 4 China 6.9 7.10 4 USA 7.5 7.77 5 Norway 6.7 -3.70 5 Norway 7.4 2.01 6 United Kingdom 4.7 -7.10 6 Netherlands 4.7 -5.50 7 Italy 3.6 8.64 7 France 4.3 9.35