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Danish exports likely to face headwinds in months ahead – Danske Bank

Through this year, Danish exports have stumbled and crawled so far. Comparing the figures to two years ago, the figures seem fine; however, exports have mostly stalled this year. Goods exports in the second quarter remained the same as compared to the beginning of the year and do not seem to have picked up in the second half of this year.

The stillness in Danish goods exports could be due to decline of over 20 percent in energy exports since the fourth quarter of last year. Exports of energy contribute slightly above 5 percent to the goods exports. Excluding the decline of energy exports, goods exports have actually risen by about 1 percent in the first half of 2017.

According to a Danske Bank research report, Denmark’s exports are expected to face some headwinds in the months ahead. The euro had strengthened considerably recently, and therefore the DKK would have a negative effect on the competitiveness of Danish companies. Moreover, wage growth in Denmark is at present higher. This is expected to hamper exports in the future. On the contrary, service exports seem to have gained momentum with the recent uptick in global trade.

“We expect to see a current account surplus of 8.3 percent of GDP this year, after which the surplus will decline to 7.8 percent as the labour market tightens and investment begins to pick up”, added Danske Bank.

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