Denmark's Growth Forecasts Dim Amid Novo Challenges and Tariffs

Denmark has lowered its 2025 economic growth forecast to 1.4%, a significant reduction from the previously anticipated 3%, according to the economy ministry. The adjustment is attributed to two main factors: weakened prospects for pharmaceutical giant Novo Nordisk and imposed tariffs on Danish exports to the United States.

The ministry expressed concerns about the pharmaceutical sector, particularly Novo Nordisk, which faces increased competition in weight loss products, impacting growth forecasts for the industry. Despite being a considerable contributor to Denmark's economy, with Novo Nordisk accounting for one-fifth of employment growth last year, the company is experiencing challenges in maintaining its competitive edge in the obesity drug market against U.S. competitor Eli Lilly.

Denmark's export-driven economy is also feeling the strain of tariffs in its largest export market, the U.S., leading to a revision of export growth to only 0.9% for 2025, down from 4.3%. However, an increase in GDP growth to 2.1% is projected for 2026 due to expected rises in private and public spending.

(With inputs from agencies.)