Something Rotten in Economy of Denmark
Now, however, growth has again dipped significantly. The latest numbers shows a mere 1.8% in annual growth, far below the EU average. That number was surprisingly low, so at first I thought the real number must be higher on account of terms of trade effects. But according to the details in the data bank, terms of trade deteriorated in fact somewhat.
This low growth number makes the fact that according to the same release, hours worked rose by 3.1% even more startling. This implies that productivity must have fallen by roughly 1.5%. If this is not some form of statistical error related to GDP growth being underestimated and/or employment growth being overestimated, that is certainly ominous for the future of the Danish economy. Also ominous are the increasing tendencies of overheating as implied by high money supply and house price increases and a current account balance falling into a deficit despite a large government budget surplus.