Budget outlook, August 2012


The international outlook has worsened since the May projection, and growth in GDP is estimated at 0.9 per cent this year, cf. Economic Survey, August 2012. However, the outlook for the Danish economy is better than in the euro area and in particular in relation to southern Europe. In 2013 the growth in GDP is estimated at 1.7 per cent.

The better growth prospect for the Danish economy mainly reflects Danish fiscal policy stimulation. The fiscal policy in 2012 and 2013 is designed to support growth and employment and at the same time improve the structural budget balance in line with the recommendation by the ECOFIN.

This should primarily be seen in the context of the political agreements in the early summer, which increase the economic activity significantly without weakening the structural budget balance. The tax reform from June 2012 supports GDP-growth in 2012 and especially in 2013, and an agreement from May 2012 boosts the renovation of social housing. Furthermore, there is a boost in investments in climate adaptation in the agreements with local governments for 2013. Moreover, the fiscal stimulus package Kick-start from November 2011 supports growth.

The central government budget proposal for 2013 and agreements for the local and regional economy for 2013 reflects a continuation of a responsible economic policy, where the structural budget is in balance, while growth and employment are supported.