Danish GDP to grow 4.0 percent as capacity pressures mount
Danmarks Nationalbank projects Danish GDP growth of 4.0 percent in 2026, warning that limited spare capacity and higher energy prices risk driving up inflation. The central bank urged the government to exercise fiscal restraint in its upcoming October budget.
Domestic drivers take over
In its September 2026 economic outlook, Danmarks Nationalbank forecast real GDP growth of 4.0 percent in 2026, moderating to 2.3 percent in 2027 and 2.0 percent in 2028.
Growth is shifting from exports toward domestic demand, supported by private consumption and public expenditure.
Headline inflation is projected at 1.7 percent in 2026 before rising to 2.4 percent in 2027 and 2.1 percent in 2028, driven by energy price increases linked to the Middle East conflict and electricity tax contributions.
Core inflation is forecast at 2.0 percent in 2026 and 2.3 percent in both 2027 and 2028.
Nationwide housing prices are expected to rise 8.6 percent in 2026, 4.6 percent in 2027 and 2.9 percent in 2028.
Tight capacity and fiscal warnings
The central bank warned of limited spare capacity to expand output without triggering wage and price pressures.
Employment continues to expand while unemployment remains stable, with artificial intelligence not expected to affect overall employment in the near term.
In Copenhagen, the owner-occupied apartment market shows initial signs of cooling through reduced sales and rising supply.
Danmarks Nationalbank advised the government to avoid further demand stimulus in the October budget bill.
No room for fiscal expansion
Danmarks Nationalbank delivers a clear warning that Denmark's strong expansion risks overheating if fiscal policy adds further stimulus.
With higher energy costs and tight capacity, the government cannot afford to spend its entire fiscal room.
Restraint in the October budget is necessary to prevent persistent wage and price pressures.
Source: Press presentation 23 September 2026
IN: