Denmark: 2025 Article IV Consultation-Press Release; and Staff Report

International Monetary Fund

No 2025/165, IMF Staff Country Reports from International Monetary Fund

Abstract: The Article IV Consultation discusses that Denmark’s strong growth has continued, primarily driven by pharmaceutical exports. Public finances and external positions are robust, and the financial system has demonstrated resilience to multiple shocks in recent years. Although Denmark’s fiscal position is strong, significantly higher and more persistent increases in defense spending would require adjustment measures to ensure long-term fiscal sustainability. Growth is expected to moderate in the near term as external demand weakens and the exceptional pharmaceutical expansion begins to normalize. Systemic risks are contained; however, the authorities should remain vigilant in monitoring financial sector risks. Banks are well-capitalized, with strong profitability, asset quality, and liquidity. Structural reforms should further intensify to sustain high levels of income, preserve fiscal space, and sustain the welfare state. The policy priority is to uphold fiscal sustainability amid rising defense and aging-related expenditures, ensure financial stability, and further intensify structural reforms to support high levels of income and sustain the welfare state.

Keywords: fluctuation band; ERM II; currency of Denmark; IMF staff calculation; single market; Defense spending; Fiscal stance; Labor markets; Securities; Anti-money laundering and combating the financing of terrorism (AML/CFT); Global; Europe; Baltics (search for similar items in EconPapers)
Pages: 68
Date: 2025-07-04
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=568286 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2025/165

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().