Denmark’s successful virus containment strategy means Omicron will not derail growth in 2022

We’ve lowered our 2022 Danish GDP forecast 0.1ppt to 3%, with the Omicron variant expected to slow activity in Q1. But the economy should make up the lost ground in the following quarters as the new restrictions – which have been quite benign – have already begun to be eased.

What you will learn:

• High vaccination rates, the rollout of boosters, and extensive testing capabilities support the easing of restrictions, meaning Omicron should not significantly alter the course of growth this year.
• We have revised up our 2022 inflation forecast to 2.3% from 1.6% owing to the persistence of supply-chain pressures in the first half of this year and still-high energy prices.
• Labour market pressures are showing no signs of easing, as the unemployment rate fell to 2.8% in November, its lowest level since October 2008.