Danmarks Nationalbank highlights Greenlandic economic slowdown and fiscal pressures

The Greenlandic economy is experiencing a notable slowdown, characterized by modest growth prospects and mounting pressure on public finances.

This deceleration is primarily attributed to the nearing completion of significant infrastructure projects, particularly airport expansions, which have been a key driver of economic activity.

Concurrently, new major projects in energy supply and other critical sectors, which were anticipated to provide future impetus, have not yet commenced.

This gap in large-scale investment contributes to the current subdued economic environment.

Furthermore, the vital shrimp stocks, a cornerstone of Greenland's fishing industry, are facing a decline, impacting a significant economic pillar.

While cod fishing shows improved performance, it does not fully offset the broader challenges.

These factors collectively contribute to a complex economic landscape that necessitates careful management and strategic planning to mitigate further deceleration and ensure long-term stability.

Greenland's public finances deteriorated sharply in 2025, leading to a critically low level of liquidity in the Greenland Treasury during the second half of the year.

This rapid decline necessitated immediate action, with the 2026 Finance Act introducing essential fiscal tightening measures to stabilize public funds.

Looking ahead, the economy faces additional structural challenges from demographic shifts.

A declining and ageing population is projected to place further pressure on the economy, impacting both labor supply and the demand for public services.

These long-term trends underscore the need for sustainable fiscal policies and economic diversification to ensure future prosperity and financial resilience.