Significant investment has been made in building road and rail links between Copenhagen and Malm, Sweden (the resund Bridge), and between Zealand and Funen (the Great Belt Fixed Link). George Lakey July 19, 2017 The waterfront district in Copenhagen. Neither Greenland nor the Faroe Islands are members of the European Union. 2. The goal is a full independence of fossil fuels by 2050. Denmark has a countrywide, but municipally administered social support system against poverty, securing that qualified citizens have a minimum living income. EH.Net Encyclopedia, edited by Robert Whaples. [125][126] For both countries, fishing industry is a major economic activity. A lower proportion of revenues in Denmark derive from taxes on corporate income and gains and property taxes than in OECD generally, whereas the proportion deriving from payroll taxes, VAT, and other taxes on goods and services correspond to the OECD average. This increase was attributed to both a larger spread in gross incomes and various economic policy measures. The years 195873 were an unprecedented high-growth period. Top Personal Income Taxes. By Nima Sanandaji, the director of the European Centre for Entrepreneurship and Policy Reform. Denmark has one of Europe's most efficient distribution systems. Long-run annual fiscal projections from the Danish government as well as the independent Danish Economic Council, taking into account likely future fiscal developments caused by demographic developments etc. The country has been a member of the European Union (EU) since 1973. It's a great place for families - it has 16 months of parental leave and free day care services - it invests in green living, has favourable economic growth, is a safe country for women, has transparency in the media and last, but by no means least - it's a beautiful country. Household balance sheets are consequently very large in Denmark compared to most other countries. Denmark has one of the lowest income inequality rates in the world. Since February 2015, the central bank has maintained a negative interest rate to contain an upward exchange rate pressure. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein. [57], Altogether, total employment in 2017 amounted to 2,919,000 people according to Statistics Denmark. The government does not have significant commercial or industrial income. Arbejdernes Landsbank, founded in 1919, is the largest bank cooperative and it is currently the 6th largest bank in the country as of 2018. In an international context, a relatively large proportion of the population is part of the labour force, in particular because the female participation rate is very high. The tendency toward fewer and larger farms has been accompanied by an increase in animal production, using fewer resources per produced unit. [78] Denmark had a government budget surplus of 1.1% of GDP in 2017.[78]. At the central government level, the Ministry of Finance carries out the coordinating role of conducting economic policy. The average for all OECD countries together was 72.1%. Denmark's GDP is forecast to contract by 5.2 percent this year, becoming the second best performing EU economy during the Coronavirus Crisis. The reasons that make Denmark's economy so successful are a very developed infrastructure, an efficient workforce and an advanced welfare system. [87] A person that is not a member of an A-kasse cannot receive unemployment benefits. [31] Consequently, foreign trade has always been very important for the economic development of Denmark. The economic role of the public sector increased considerably, and the country was increasingly transformed from an industrial country to a country dominated by production of services. Consequently, the central bank has no role in a domestic stabilization policy. Denmark is presently the only OECD member country maintaining an independent currency with a fixed exchange rate. The welfare system related to the labor market has experienced several reforms and financial cuts since the late 1990s due to political agendas for increasing the labor supply. The emerging trade implied specialization which created demand for means of payments, and the earliest known Danish coins date from the time of Svend Tveskg around 995. Economie suisse, umbrella organisation for the Swiss economy. [88] Unemployment funds do not pay benefits to sick members, who will be transferred to a municipal social support system instead. Goods (2021) - Main Imports (% of total goods imports), Machinery (excl. "Danske minkfarmere [Danish Mink Farmers]", "Danfoss Rejsen mod Engineering Tomorrow", "Danish Grundfos the world's largest pump group", "Table NABP69: 12.1.1 Production and generation of income (69-grouping) by transaction, industry and price unit. Denmark 's top statutory personal income tax rate is 55.9 percent, Norway 's is 38.4 percent, and Sweden 's is 57.1 percent. Several reforms of the rights of the unemployed have followed up, partially inspired by the Danish Economic Council. [109] In 1997, Denmark became self-sufficient with energy[110] and the overall CO2 emission from the energy sector began to fall by 1996. The most notable companies include: Many of the largest food producers are also engaged in biotechnology and research. At first, the krone was pegged to the European Currency Unit or ECU, from 1987 to the Deutsche Mark, and from 1999 to the euro.[67]. [33], According to economic historian Angus Maddison, Denmark was the sixth-most prosperous country in the world around 1600. The economy is based primarily on service industries, trade, and manufacturing; only a tiny percentage of the population is engaged in agriculture and fishing. In particular, the Danish national saving rate in financial assets increased by 11 per cent of GDP from 1980 to 2015. (e.g. The economy is based primarily on service industries, trade, and manufacturing; only a tiny percentage of the population is engaged in agriculture and fishing. The labour market is also traditionally characterized by a high degree of flexicurity, i.e. At the same time, average household gross debt was almost 300% of disposable income, which is also at the highest level in OECD. Long-standing economic collaboration between Denmark and the other Nordic countriesincluding those that have not joined the EUalso continues today. [123][124] The share of total energy production is smaller: In 2015, wind accounted for 5% of total Danish energy production.[112]. [53] This includes mandatory activation for those unemployed under the age of 30. [47] According to data from Eurostat, Denmark was the EU country with the seventh-lowest Gini coefficient in 2017. Looking good despite it all (photo: Pixabay/ASSY) Denmark's economy is forecast to be the second best performer as the EU emerges from the Coronavirus Crisis, according to the European Commission. Small enterprises are dominant. [56], According to Eurostat, the unemployment rate was 5.7% in 2017. Data retrieved 25 November 2018", "Denmark. In the first decade of the 21st century new economic policy issues have emerged. Brief from Danske Bank, published 24 March 2014. Within animal husbandry, it includes dairy and beef cattle, pigs, poultry and fur animals (primarily mink) all sectors that produce mainly for export. The Danish economy emerged relatively unscathed from the pandemic, with a shallow 2 percent recession in 2020. This site contains PDF documents. In January 2016 the rate was raised to 0.65%, at which level it has been maintained since then. The OECD average was 34.2%. Yet the Nordic. [72], Danish fiscal policy is generally considered healthy. Denmark has created a society where everyone works to help out everyone else. Its score is 0.4 point lower than last year. [102], Denmark is also a large exporter of pumps, with the company Grundfos holding 50% of the market share, manufacturing circulation pumps. per capita since 2007 is comparable to the declines in debt-crisis countries like Portugal or Spain, even though Denmark has never lost the . This is the conclusion drawn by Danmarks Nationalbank in a projection for the Danish economy, in which the gross domestic product (GDP) is forecast to increase by 3.3 per cent. [26] In 2017, Denmark had the seventh-lowest Gini coefficient (a measure of economic inequality) of the then 28 European Union countries. Swissfirms, directory of Swiss companies. [55] On a more macro scale, a study of the impact of ALMPs in Denmark between 1995 and 2005 showed that such policies had positive impact not just on employment but also on earnings. The electricity grids of western Denmark and eastern Denmark were not connected until 2010 when the 600MW Great Belt Power Link went into operation. 10 EU member countries had a lower unemployment rate than Denmark in 2017. The World Factbook, CIA, retrieved 7 December 2018", "Faroe Islands Economy overview. Secure .gov websites use HTTPS [63] Most of Denmark's most important trading partners are neighbouring countries. [42] Over the years, the wealth of the Danish pension funds have accumulated so that in 2016 it constituted twice the size of Denmark's GDP. Foreign Direct Investment Attraction Events, Services for U.S. Companies New to Exporting, Services for U.S. Companies Currently Exporting, Leading Sectors for US Exports & Investments, Healthcare and Lifescience Products and Services, Licensing Requirements for Professional Services. While workers unions often serve independently between companies in other countries, Denmark strives to unify workers unions for increased negotiation power. OECD Economic Surveys: Denmark. Two hundred professional producers are responsible for the Danish egg production, which was 66 million kg in 2011. The Danish fiscal policy is characterized by a long-term outlook, taking into account likely future fiscal demands. [99] Denmark also has a small production of fox, chinchilla and rabbit furs.[98]. The Danish tax-to-GDP-ratio of 46% was the second-highest among all OECD countries, second only to France. From the 1980s economic policies have increasingly been oriented towards a long-term perspective, and gradually a series of structural reforms have solved these problems. However, most are more than happy to pay this, because they get a lot of benefits in return. [62] Service exports were dominated by freight sea transport services from the Danish merchant navy. English Summary, p. 341", "Household wealth and debt. Special attention is given to the welfare of the mink, and regular "Open Farm" arrangements are made for the general public. Disabled people can apply for permanent social pensions. The SME portal of the State Secretariat for Economic Affairs, SECO Danish income taxes are based on a progressive tax system, so if you make more than 61,500 euros (about $67,000) per year, an additional tax rate of 7 percent is added over this threshold . 90% of the pork from Denmark is exported, and the country has over 5,000 pig farms. [97] Approximately 98 percent of the skins sold at Kopenhagen Fur Auction were exported. The number of farms peaked in the late 1980s at more than 5,000 farms, but the number has declined steadily since, as individual farms grew in size. [113] Since 1972, the overall energy consumption has dropped by 6%, even though the GDP has doubled in the same period. Frre end 10.000 heltids-landbrug tilbage i Danmark. American firms are also notably present in business and financial services, pharmaceuticals, and offshore oil and gas exploration and production. In 2017, the export of organic products reached DK 2.95billion, a 153% increase from 2012 five years earlier, and a 21% increase from 2016. Information in English on website of Danish Economic Councils, retrieved 24 November 2018". Retrieved on 28 November 2018". Consequently, the Danish krone is the only currency in the European Exchange Rate Mechanism II (ERM II). Landbrugsavisen.dk published 12 October July 2017, retrieved 28 November 2018. American-owned firms play an important role in Denmark. Energinet.dk is the Danish national transmission system operator for electricity and natural gas. In Denmark, every citizen can choose a doctor in their area. [60], As a small open economy, Denmark is very dependent on its foreign trade. The study ranks the average Danish household as having the fifth highest footprint. expenditure another 3.4% of GDP. On Sept. 10, Danish authorities lifted all pandemic restrictions and pronounced that covid-19 is no longer a " critical threat " in the country. Danish dairy farmers are among the largest and most modern producers in Europe. In 2012, 100million chickens were slaughtered. Retrieved on 29 November 2018", "People at risk of poverty or social exclusion", "Gini coefficient of equivalised disposable income EU-SILC survey", "Employment rate by sex, age group 2064", "Table RAS300: EMPLOYED (END NOVEMBER) BY INDUSTRY (DB07), SOCIOECONOMIC STATUS, AGE AND SEX. The most important sectors of Denmark's economy in 2020 were public administration, defence, education, human health and social work activities (21.5%), wholesale and retail trade, transport, accommodation and food services (19.3%) and industry (18.2%). The economy of Denmark has grown to become a modern day market economy that possesses an advanced industrial sector alongside its traditional and now high-tech agricultural sector. In Denmark, you don't have to worry about paying for healthcare, and university students don't pay any tuition fees. 1. [107], Denmark has changed its energy consumption from 99% fossil fuels (92% oil (all imported) and 7% coal) and 1% biofuels in 1972 to 73% fossil fuels (37% oil (all domestic), 18% coal and 18% natural gas (all domestic)) and 27% renewables (largely biofuels) in 2015. is a net exporter of food, oil, and gas and enjoys a . [83], Professor of Economics at Princeton University Henrik Kleven has suggested that three distinct policies in Denmark and its Scandinavian neighbours imply that the high tax rates cause only relatively small distortions to the economy: widespread use of third-party information reporting for tax collection purposes (ensuring a low level of tax evasion), broad tax bases (ensuring a low level of tax avoidance), and a strong subsidization of goods that are complementary to working (ensuring a high level of labour force participation). Chickens for slaughter are often produced in units with 40,000 broilers. English Summary, p. 335f", "Gini coefficient of equivalised disposable income EU-SILC survey. [86] Not every Danish citizen or employee qualifies for a membership of an unemployment fund, and membership benefits will be terminated after 2 years of unemployment. Denmark has a very long tradition of adhering to a fixed exchange-rate system and still does so today. The Kingdom of Denmark also includes Greenland and the Faroe Islands. "Table EDP3: Denmark's EMU-debt and EMU-deficit by function (% of GDP)", "Table EDP2: EU-countries, public finances by country and function (in% of GDP)", "Denmarks Convergence Programme 2018. But, in fact, Denmark, separated from Sweden by a bridge, has been far more successful: Denmark's death rate from Covid-19 per million people is less than one-third of Sweden's, and . [6] The sector is very capital-intensive, so the share of employment is much lower: About 2,000 persons worked in the oil and gas extraction sector in 2016, and another 1,000 persons in extraction of gravel and stone, or in total about 0.1% of total employment in Denmark.[14]. The period 182294 saw on average an annual growth in factor incomes of 2% (0.9% per capita) From around 1830 the agricultural sector experienced a major boom lasting several decades, producing and exporting grains, not least to Britain after 1846 when British grain import duties were abolished. [43] The pension wealth consequently is a very important both for the life-cycle of a typical individual Danish household and for the national economy. [50] The effective compensation rate for unemployed workers has been declining for the last decades, however. Switzerland Global Enterprise, organisation for export and investment promotion. 16001917. A second national accounts release confirmed the economy dodged a sequential contraction in Q4 as GDP expanded 0.9%. Statistikbanken.dk/10021:Befolkning og valg/(table)FOLK1AM, In this context, "self-sufficient" means that the domestic energy production is equal to the energy consumption in terms of, Economic and Monetary Union of the European Union, Danish Christmas Tree Growers Association, "World Economic Outlook Database, April 2019", "Report for Selected Countries and Subjects: April 2023", "The outlook is uncertain again amid financial sector turmoil, high inflation, ongoing effects of Russia's invasion of Ukraine, and three years of COVID", "Table NABP10: 12.1.1 Production and generation of income (10a3-grouping) by transaction, industry and price unit. Prior to a government-mandated culling during the COVID-19 pandemic, Denmark was the world's largest producer of mink furs, with 1,400 mink farmers fostering 17.2million mink and producing around 14million furs of the highest quality every year (see mink industry in Denmark). Denmark's economic freedom score is 77.6, making its economy the 9th freest in the 2023 Index. For example, 80% of participants in the Building Bridge for Education program felt that "the initiative has helped them to move towards completing an education". In 2020, Poland's GDP contracted by "only" 3.5%, significantly less than the OECD average of 5.5%. American Mink are now widespread in Denmark and continues to cause problems for the native wildlife, in particular waterfowl. From danmarkshistorien.dk, Aarhus University. About 4,200 farmers produce 28million pigs annually. [70], Inflation in Denmark as measured by the official consumer price index of Statistics Denmark was 1.1% in 2017. Denmark has one of Europe's most efficient distribution systems. These reasons cannot be described in a few sentences. Because their economy makes sense By organizing movements to override the will of their 1 percent, the people of Denmark were able to move toward an economy of shared abundance and overall greater happiness. Unlike most of its neighbours, Denmark has not had extractable deposits of minerals or fossil fuels, except for the deposits of oil and natural gas in the North Sea, which started playing an economic role only during the 1980s. Denmark's active labour market policies particularly focus on tackling youth unemployment. Uniform commercial legislation in the Nordic countries dates to the 19th century. [98] Mink thrive in, but are not a native to Denmark, and it is considered an invasive species. "Table IFOR41: Inequality indicators on equivalised disposable income by indicator and municipality. Whereas Denmark's neighbours like Norway, Sweden, Poland and the United Kingdom generally follow inflation targeting in their monetary policy, the priority of Denmark's central bank is to maintain exchange rate stability. The Scandinavian country's unemployment rate now stands at an incredibly low 4.3 per cent, which basically means that anyone who is willing and able to work is working. [45] However, inequality has increased during the last decades. Dated January 2008, retrieved 1 December 2018. Wind produced the equivalent of 43% of Denmark's total electricity consumption in 2017. [54] This is combined with education, skill development and work training programs. Situated within the Nordic region, Denmark, like Finland, Norway, and Sweden, is an advanced, high-income, and highly connected country. Agricultural exports. Until 2017, unemployment rates have generally been considered to be above their structural level, implying a relatively stagnating economy from a business-cycle point of view. Denmark ranks 10th most competitive economy in the world, according to the World Economic Forum's Global Competitiveness Report 2018. Denmark now faces a potential mild contraction of GDP in 2023 due to geopolitical developments, high inflation and energy prices, and a tight labor market. education and health care expenditure), and government investment (infrastructure etc.) Denmark produces three times the amount of food it needs for itself, with exports of pig meat accounting for almost half of all agricultural exports and more than 5% of Denmark's total. Denmark now faces a potential mild contraction of GDP in 2023 due to geopolitical developments, high inflation and energy prices, and a tight labor market. Denmark is a long time leader in wind power. Two main reasons for this large change in domestic saving behaviour were the growing importance of large-scale compulsory pension schemes and several Danish fiscal policy reforms during the period which considerably decreased tax deductions of household interest expense, thus reducing the tax subsidy to private debt. Scandinavian countriesspecifically, Norway, Sweden, Denmark, and Finlandare perceived as socialist because their citizens pay very high income taxes. P. 146. [79][80] This implies that under the assumptions employed in the projections, fiscal policy could be permanently loosened (via more generous public expenditures and/or lower taxes) by ca. Private vehicles are increasingly used as a means of transport. [30] The labour market is traditionally characterized by a high degree of union membership rates and collective agreement coverage. Occasionally, the question of calling another referendum on the issue has been discussed, but since the Financial crisis of 20072008 opinion polls have shown a clear majority against Denmark joining the EMU,[68] and the question is not high on the political agenda presently. The announcement of a consistent and hence more credible fixed exchange rate in 1982 has helped reducing the inflation rate. According to the World Bank, gross national income per capita was the tenth-highest in the world at $55,220 in 2017. [31] However, the Napoleonic Wars caused Copenhagen to lose its status as an international centre of finance and trade. Foreign trade increased heavily relative to GDP. Greenland left the European Economic Community in 1986, and the Faroe Islands declined membership in 1973, when Denmark joined. [84], Parallel to the high tax level, government expenditures make up a large part of GDP, and the government sector carries out many different tasks. For instance, the Building Bridge to Education program was started in 2014 to provide mentors and skill development classes to youth that are at risk of unemployment. Correcting for purchasing power, per capita income was Int$57,781 or 10th-highest globally. Approximately 90 percent of the production is exported. Denmark first introduced active labour market policies (ALMPs) in the 1990s after an economic recession that resulted in high unemployment rates. For more than 100 years the production of pigs and pig meat was a major source of income in Denmark. Danish exports to the United States have increased substantially, and in 2020 the United States surpassed Germany to become Denmarks largest export market. In 2017, the current account surplus amounted to approximately 8% of GDP. [108] The course took a giant leap forward in 1984, when the Danish North Sea oil and gas fields, developed by native industry in close cooperation with the state, started major productions. [71], Since a local-government reform in 2007, the general government organization in Denmark is carried out on three administrative levels: central government, regions, and municipalities. The population size relative to arable agricultural land was small so that the farmers were relatively affluent, and Denmark was geographically close to the most dynamic and economically leading European areas since the 16th century: the Netherlands, the northern parts of Germany, and Britain. Correcting for purchasing power, income was Int$52,390 or 16th-highest among the 187 countries. Website of Danmarks Nationalbank, published 21 February 2014 with updates April 2017, retrieved 28 November 2018". As a consequence of the exchange rate policy, the bank must always adjust its interest rates to ensure a stable exchange rate and consequently cannot at the same time conduct monetary policy to stabilize e.g. Amager Bakke is an example of a new incinerator. Whereas in 1980 annual inflation was more than 12%, in the period 20002017 the average inflation rate was 1.8%. A study published earlier this year reveals the average carbon footprint for households in EU countries, and the news is not good for those of us in Denmark. Kvartalsoversigt, 3. kvartal 2012, del 1. There is an emphasis on achieving a desirable work-life balance. Following a monetary reform after the Napoleonic wars, the present Danish central bank Danmarks Nationalbank was founded in 1818. English Summary, p. 297", "Danish Economic Councils. Secondly, compulsory funded pension schemes became normal for most employees from the 1990s. Vaccination rates are high 86 percent of . (Wikimedia / Srvora) Local government Before 1970, local government in Denmark was carried out by a system of county council districts, boroughs, and parishes. Still, 80 to 85% of the population lived in small villages on a subsistence level. [104], In 2017 total output (gross value added) in service industries amounted to 75.2% of total output in Denmark,[6] and 79.9% of all employed people worked here (in 2016). Finland has been the world's happiest country for four years running; Denmark and Norway hold all but one of the other titles (which went to Switzerland in 2015). Almost all of the land area of Denmark is arable. A relatively large proportion of the population is active on the labour market, not least because of a very high female participation rate. Olga Kovitidi, a so-called "senator from Crimea", quoted by The Insider Quote from Kovitidi: "About the attack by a Ukrainian Armed . Last update 31 October 2018", "Table NAN1: Demand and supply by price unit, transaction and time. The economy displays a number of strengths. Denmark is a firm advocate of liberal trade and investment policies and actively encourages foreign investment. Our deaths are again running at more than 2,000 a day.