Denmark's standard of living is among the highest in the world with a GDP per capita of $67,196 in 2021. Though eligible to join the Economic and Monetary Union of the European Union (EMU), the Danish voters in a referendum in 2000 rejected exchanging the krone for the euro. The most notable companies include: Many of the largest food producers are also engaged in biotechnology and research. have a non-negative fiscal sustainability indicator. Disabled people can apply for permanent social pensions. New cars are taxed by means of a registration tax (85% to 150%) and VAT (25%). Of these, 20.9million are slaughtered in Denmark. There are more than 550 American subsidiaries established in Denmark and a strong American Chamber of Commerce with approximately 240 members. Unlike most of its neighbours, Denmark has not had extractable deposits of minerals or fossil fuels, except for the deposits of oil and natural gas in the North Sea, which started playing an economic role only during the 1980s. In 2017, 78.8% of all 15-to-64-year-old people were active on the labour market, the sixth-highest number among all OECD countries. Export of dairy products accounts for more than 20 percent of the total Danish agricultural export. Retrieved on 28 November 2018", "Country Comparison: Distribution of family income Gini index", "Costs and benefits of Danish active labour market programmes", "Denmark a Nordic Welfare State Are the Active Labour Market Policy Withering Away? Several reforms of the rights of the unemployed have followed up, partially inspired by the Danish Economic Council. It was ultimately a challenge to fiscal sustainability from demographic development, in particular higher longevity. Brief from Danske Bank, published 24 March 2014. [27], The Danish labour market is characterized by a high degree of union membership rates and collective agreement coverage dating back from Septemberforliget (The September Settlement) in 1899 when the Danish Confederation of Trade Unions and the Confederation of Danish Employers recognized each other's right to organise and negotiate. CEPOS Think Tank for a liberal economy and limited Government etc. Peter Bejder and Benjamin Kristensen: Merkantilisme og danske tropekolonier, ca. 1. In 2016, 62,000 people, or 2.5% of all employed people worked in agriculture and horticulture. [14] Main sub-industries are manufacture of pharmaceuticals, machinery, and food products. [43] The pension wealth consequently is a very important both for the life-cycle of a typical individual Danish household and for the national economy. The material standard of living has experienced formerly unknown rates of growth, and the country has been industrialized and later turned into a modern service society. Greenland left the European Economic Community in 1986, and the Faroe Islands declined membership in 1973, when Denmark joined. Top Personal Income Taxes. Denmark is an example of the Nordic model, characterized by an internationally high tax level, and a correspondingly high level of government-provided services (e.g. Denmark has a very long tradition of adhering to a fixed exchange-rate system and still does so today. While unemployment benefits are provided, the policies are designed to motivate job-seeking. [93], 63% of the land area of Denmark is used for agricultural production the highest share in the world according to a report from University of Copenhagen in 2017. For example, 80% of participants in the Building Bridge for Education program felt that "the initiative has helped them to move towards completing an education". Official websites use .gov [107], Denmark has changed its energy consumption from 99% fossil fuels (92% oil (all imported) and 7% coal) and 1% biofuels in 1972 to 73% fossil fuels (37% oil (all domestic), 18% coal and 18% natural gas (all domestic)) and 27% renewables (largely biofuels) in 2015. The years 195873 were an unprecedented high-growth period. Last year, Denmark pledged to end oil and gas exploration by 2050 . [111] Wind energy contribution to the total energy consumption has risen from 1% in 1997 to 5% in 2015. [48] The degree of flexibility is in part maintained through active labour market policies. Denmark's GDP is forecast to contract by 5.2 percent this year, becoming the second best performing EU economy during the Coronavirus Crisis. [62] Service exports were dominated by freight sea transport services from the Danish merchant navy. The claim that Denmark is ranked the happiest country in the world due to its short workweeks, high minimum wage, and free university and health and child care is rated PARTLY FALSE, based on our. Date 9 February 2015. [92], Agriculture was once the most important industry in Denmark. Already during the Stone Age there was some foreign trade,[32] and even though trade has made up only a very modest share of total Danish value added until the 19th century, it has been decisive for economic development, both in terms of procuring vital import goods (like metals) and because new knowledge and technological skills have often come to Denmark as a byproduct of goods exchange with other countries. Government net debt was close to zero at the end of 2017, amounting to DKK 27.3billion, or 1.3% of GDP. [31] However, the Napoleonic Wars caused Copenhagen to lose its status as an international centre of finance and trade. They have had a "youth initiative" or the Danish Youth Unemployment Programme in place since 1996. Date 6 October 2006". Website of Danmarks Nationalbank, published 21 February 2014 with updates April 2017, retrieved 28 November 2018". Retrieved 25 November 2018. The period 182294 saw on average an annual growth in factor incomes of 2% (0.9% per capita) From around 1830 the agricultural sector experienced a major boom lasting several decades, producing and exporting grains, not least to Britain after 1846 when British grain import duties were abolished. Slovakia, Slovenia, Czechia, Finland, Belgium and the Netherlands had a lower Gini coefficient for disposable income than Denmark. Government consumption took up precisely 25% of GDP (e.g. "Danske minkfarmere [Danish Mink Farmers]", "Danfoss Rejsen mod Engineering Tomorrow", "Danish Grundfos the world's largest pump group", "Table NABP69: 12.1.1 Production and generation of income (69-grouping) by transaction, industry and price unit. Comparatively, Denmark is favorably positioned According to the World Bank, gross national income per capita was the tenth-highest in the world at $55,220 in 2017. A .gov website belongs to an official government organization in the United States. People in Denmark pay a huge amount of tax on their income, and up to 25% value-added tax on most items. [122] It has integrated fluctuating and less predictable energy sources such as wind power into the grid. The economy is based primarily on service industries, trade, and manufacturing; only a tiny percentage of the population is engaged in agriculture and fishing. The key category driving this increase continues to be chemicals, as one-fourth of Danish exports from this category went to the United States. Responding to this, age eligibility rules for receiving public age-related transfers were changed. transport equipment): 17.4%, Live animals, food, beverages and tobacco: 7.7%. At the central government level, the Ministry of Finance carries out the coordinating role of conducting economic policy. Denmark has fostered and is home to many multi-national companies. [30] The labour market is traditionally characterized by a high degree of union membership rates and collective agreement coverage. P. 146. Here's the first and most important reason the Danes enjoy such a high quality of life: because of the welfare state and an otherwise activist government that attempts to govern in the interest. Facing a Foreign Trade AD/CVD or Safeguard Investigation? Unemployment by sex and age annual average. OECD's periodic surveys of the Danish economy. [58], The share of employees leaving jobs every year (for a new job, retirement or unemployment) in the private sector is around 30%[59] a level also observed in the U.K. and U.S.- but much higher than in continental Europe, where the corresponding figure is around 10%, and in Sweden. [6] Despite this, Denmark is still home to various types of agricultural production. The World Factbook, CIA, retrieved 7 December 2018", "The Faroe Islands and the European Union", "What is Greenland's relationship with the EU? But, in fact, Denmark, separated from Sweden by a bridge, has been far more successful: Denmark's death rate from Covid-19 per million people is less than one-third of Sweden's, and . 1% of GDP while still maintaining a stable government debt-to-GDP ratio in the long run. Waste-to-energy incinerators produce mostly heating and hot water. At first, the krone was pegged to the European Currency Unit or ECU, from 1987 to the Deutsche Mark, and from 1999 to the euro.[67]. [70], Inflation in Denmark as measured by the official consumer price index of Statistics Denmark was 1.1% in 2017. [41] Instead, issues like decreasing productivity growth rates and increasing inequality in income distribution and consumption possibilities are prevalent in the public debate. [100], Denmark has the highest retail consumption share for organic products in the world. Kapitel III i De konomiske Rds Formandskab: Dansk konomi, efterr 2016. Olga Kovitidi, a so-called "senator from Crimea", quoted by The Insider Quote from Kovitidi: "About the attack by a Ukrainian Armed . (Wikimedia / Srvora) [72], Danish fiscal policy is generally considered healthy. [116][117], Denmark has low electricity costs (including costs for cleaner energy) in EU,[119] but general taxes (11.7billion DKK in 2015)[118] make the electricity price for households the highest in Europe. USA.gov|FOIA|Privacy Program|EEO Policy|Disclaimer|Information Quality Guidelines |Accessibility, Official Website of the International Trade Administration, Comply with U.S. and Foreign Export Regulations. Uniform commercial legislation in the Nordic countries dates to the 19th century. Steen Busck: Merkantilisme. Swissfirms, directory of Swiss companies. expenditure another 3.4% of GDP. Date 6 July 2012. Altogether, the amount of revenue from taxes paid in 2017 amounted to 46.1% of the GDP. Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching . Denmark has one of Europe's most efficient distribution systems. In 2017, the share was at 13.3%, accounting for a total of DKK 12.1billion. Mainly because of these changes, from 2012 onwards the Danish fiscal sustainability problem is generally considered to be solved. Denmark is a long-standing member of the European Union; as such, it benefits from numerous trade (and other) policies which help to significantly boost the country's economy. The economy is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture. Household balance sheets are consequently very large in Denmark compared to most other countries. Since 2012, calculations of future fiscal challenges, from both the government and independent analysts, have generally perceived Danish fiscal policy to be sustainable. Denmark is the largest producer of oil and natural gas in the EU. The five main importers of Danish goods and services in 2017 were Germany, Sweden, United Kingdom, United States and Norway. Denmark invests heavily in active labor market policies and the concept of flexicurity has been important historically. [112] Denmark had the 6th best energy security in the world in 2014. Kvartalsoversigt, 3. kvartal 2012, del 1. [75][76] The government sector having a fair amount of financial assets as well as liabilities, government gross debt amounted to 36.1% of GDP at the same date. [81] The all-record highest Danish tax level was 49.8% of GDP,[81] reached in 2014 because of high extraordinary one-time tax revenues caused by a reorganization of the Danish-funded pension system. Denmark is presently the only OECD member country maintaining an independent currency with a fixed exchange rate. When grain production became less profitable in the second half of the century, the Danish farmers made an impressive and uniquely successful change from vegetarian to animal production leading to a new boom period. For more than 100 years the production of pigs and pig meat was a major source of income in Denmark. Prescription drugs are inexpensive and free for those under 18 years of age. After some years of stagnation, close to 10% of the cultivated land is now categorized as organically farmed, and 13.6% for the dairy industry, as of 2017. Sick people can receive some financial support throughout the extent of their illness. Appointed to his role in 2019, Jrgensen has set an aggressive agenda for dealing with climate change. [79][80] This implies that under the assumptions employed in the projections, fiscal policy could be permanently loosened (via more generous public expenditures and/or lower taxes) by ca. According to IMD "Denmark reaches the top spot thanks to the quality of its economic policies during the pandemic and gains in international investments." Work-life balance makes Denmark a great place for employees Marking a break with decades of pro-privatization dogma, the bill is a small step toward an economy that serves social need, not just profits for shareholders. The global Great Recession during the late 2000s, the accompanying Euro area debt crisis and their repercussions marked the Danish economy for several years. The social welfare system ensures low poverty and low income-inequality. The flexicurity of labor market flexibility alongside the security of a strong social safety net helps adjust to shocks while limiting the social cost of unemployment and the risk that it could become entrenched. However, we tried to offer the most important of them: 1st reason: One of the hallmarks of the Nordic countries is the combination of large area and small number of people living there. Denmark is famous for exporting milk and pork to European countries. Coop Danmark started out as "Fllesforeningen for Danmarks Brugsforeninger" (FDB) in 1896 and now has around 1.4million members in Denmark as of 2017. Eurostat, data retrieved 28 November 2018", ENERGY PRICES AND TAXES, COUNTRY NOTES, 3rd Quarter 2015, "Danish exports of green technology increased by billions in 2019", "Denmark breaks its own world record in wind energy", "Greenland Economy overview. [82] The tax structure of Denmark (the relative weight of different taxes) also differs from the OECD average, as the Danish tax system in 2015 was characterized by substantially higher revenues from taxes on personal income, whereas on the other hand, no revenues at all derive from social security contributions. Denmark's active labour market policies particularly focus on tackling youth unemployment. Similarly, in 2010 Denmark was ranked number one amongst Nordic countries for expenditure on ALMPs.[52]. Private vehicles are increasingly used as a means of transport. The Kingdom of Denmark also includes Greenland and the Faroe Islands. [121], Denmark is a long-time leader in wind energy and a prominent exporter of Vestas and Siemens wind turbines, and in 2019 Denmark's exports of wind-turbine technology and services amounted to 8.9 billion. Why do the Danes score so highly on international happiness surveys? On Sept. 10, Danish authorities lifted all pandemic restrictions and pronounced that covid-19 is no longer a " critical threat " in the country. Danish exports to the United States have increased substantially, and in 2020 the United States surpassed Germany to become Denmarks largest export market. In Denmark, you don't have to worry about paying for healthcare, and university students don't pay any tuition fees. It's Scandinavia's most cost-efficient location with favourable business conditions. health care, child care and education services). robotics: the country prides itself on the prime robots . Prior to a government-mandated culling during the COVID-19 pandemic, Denmark was the world's largest producer of mink furs, with 1,400 mink farmers fostering 17.2million mink and producing around 14million furs of the highest quality every year (see mink industry in Denmark). All the Worlds a Stage: 6 Places in Shakespeare, Then and Now, 19 Significant Buildings Worth Seeing in Denmark, Match the Country with Its Hemisphere Quiz. Denmarks fiscal position is sound, and the country entered the global COVID-19 pandemic from a position of strength, highlighted by the Danish economy having a low fiscal deficit of 2.3 percent of GDP in 2021. 2. [79], Denmark has an unemployment insurance system called the A-kasse (arbejdslshedskasse). The economy of Denmark is a modern mixed economy with comfortable living standards, a high level of government services and transfers, and a high dependence on foreign trade. Among which are the high-performing Danish economy, attractive taxation schemes, flexible labour market, and collaborative work culture. In 2017, the current account surplus amounted to approximately 8% of GDP. Privileged business conditions. The Danish model of higher taxation and a more comprehensive, free, welfare state has both a cost and a benefit. [97] Approximately 98 percent of the skins sold at Kopenhagen Fur Auction were exported. [25], During the last three decades household saving rates in Denmark have increased considerably. The leading United States exports to Denmark are industrial machinery, capital equipment, computers and telecom products, software, aircraft, and scientific instruments. In 2012, 100million chickens were slaughtered. education and health care expenditure), and government investment (infrastructure etc.) [51] This was the highest amongst the OECD countries. However, most are more than happy to pay this, because they get a lot of benefits in return. Steen Busck: Udenrigshandel fr 1848. Confederation of Danish Industry, 18 June 2018. Why are the Danes so happy? After the breakdown of the international Bretton Woods system in 1971, Denmark devalued the krone repeatedly during the 1970s and the start of the 1980s, effectively maintaining a policy of "fixed, but adjustable" exchange rates. Switzerland Global Enterprise, organisation for export and investment promotion. The first half of the century was marked by the two world wars and the Great Depression during the 1930s. Read More About DenmarkDenmark's economic freedom score is 77.6, making its economy the 9th freest in the 2023 Index. "Nej"-sidens forspring skrumpet en smule. Eurostat, last data update 20 November 2018, retrieved 28 November 2018", "Minimum Wage in Denmark Frequently Asked Questions", "Ingrid Henriksen: An Economic History of Denmark. Organic farming and production has increased considerably and continuously in Denmark since 1987 when the first official regulations of this particular agricultural method came into effect. With a gross domestic product (GDP) of $2.83 trillion in 2019 and a population of more than 66 million, the United Kingdom has the sixth-largest economy after . Long-standing economic collaboration between Denmark and the other Nordic countriesincluding those that have not joined the EUalso continues today. Denmark is a long time leader in wind power. Center for Alternativ Samfundsanalyse Centre for Alternative Social Analysis, Economic History Services Encyclopedia: Denmark, Organisation for Economic Co-operation and Development (OECD), Convention on the Organisation for Economic Co-operation and Development, Programme for International Student Assessment, Programme for the International Assessment of Adult Competencies, Trade-Related Aspects of Intellectual Property Rights, Special administrative regions of the People's Republic of China, Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Patents, trademarks, and industrial design filing activity, Number of broadband Internet subscriptions, https://en.wikipedia.org/w/index.php?title=Economy_of_Denmark&oldid=1152229713, Articles with Danish-language sources (da), Short description is different from Wikidata, Articles containing potentially dated statements from 2015, All articles containing potentially dated statements, Creative Commons Attribution-ShareAlike License 3.0, wind turbines, pharmaceuticals, medical equipment, shipbuilding and refurbishment, iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, LEGO, construction, furniture and other wood products, wind turbines, pharmaceuticals, machinery and instruments, meat and meat products, dairy products, fish, furniture and design, machinery and equipment, raw materials and semimanufactures for industry, chemicals, grain and foodstuffs, consumer goods, Officially the Republic of China, participates as ", This page was last edited on 28 April 2023, at 23:53. In fact, Denmark's 5.5 percent decline in real G.D.P. Fur animal production on an industrial scale started in the 1930s in Denmark. From danmarkshistorien.dk, Aarhus University. Approval is not automatic, and the extent of this system has generally been diminished since the 1980s. [14] Apart from public administration, education and health services, main service sub-industries were trade and transport services, and business services.[14]. Denmark is a firm advocate of liberal trade and investment policies and actively encourages foreign investment. There exists national accounting data for Denmark from 1820 onwards thanks to the pioneering work of Danish economic historian Svend Aage Hansen. This attrition can be very costly, with new and old employees requiring half a year to return to old productivity levels, but with attrition bringing the number of people that have to be fired down. Consequently, the Danish krone is the only currency in the European Exchange Rate Mechanism II (ERM II). [88] Unemployment funds do not pay benefits to sick members, who will be transferred to a municipal social support system instead. In comparison to Americans, Danes work considerably less. The labour market is also traditionally characterized by a high degree of flexicurity, i.e. [69], In the first months of 2015, Denmark experienced the largest pressure against the fixed exchange rate for many years because of very large capital inflows, causing a tendency for the Danish krone to appreciate. The main railway operator is Danske Statsbaner (Danish State Railways) for passenger services and DB Schenker Rail for freight trains. Website of Danmarks Nationalbank, retrieved 25 November2018", "Table PRIS112: CONSUMER PRICE INDEX (2015=100) BY MAIN FIGURES. Energinet.dk is the Danish national transmission system operator for electricity and natural gas. Exports to the United States constituted 11.9 percent of total Danish exports in 2021. This increase was attributed to both a larger spread in gross incomes and various economic policy measures. Why is Denmark's economy so good? [104], In 2017 total output (gross value added) in service industries amounted to 75.2% of total output in Denmark,[6] and 79.9% of all employed people worked here (in 2016). The reasons that make Denmark's economy so successful are a very developed infrastructure, an efficient workforce and an advanced welfare system. In most of recorded history Denmark has been an agricultural country with most of the population living on a subsistence level. Amager Bakke is an example of a new incinerator. Copenhagen has a small Metro system, the Copenhagen Metro and the greater Copenhagen area has an extensive electrified suburban railway network, the S-train. is a net exporter of food, oil, and gas and enjoys a . Beyond prioritization of the issue, Denmark combats poverty rates through the unification and centralization of social programs. English Summary", "SKTRYK: Tax level by national account groups", "LBESK02: EMPLOYEES (MONTH) BY SECTOR (2-GRP)", "Introducing Masters Unemployment Insurance Fund", "konomisk tilskud fra kommunen [financial support from the municipality]", "Sygedagpenge [Social benefits for the sick]", "F overblikket over dagpengereformen [Get an overview of the unemployment benefit reform]", "Table BDF11: Farms by region, unit, type of farms and area. Why is the Netherlands Economy so Rich? The number of dairy farmers has reduced to about 3,800 with an average herd size of 150 cows. Retrieved on 23 November 2018". Top personal income tax rates are rather high in Scandinavian countries, except in Norway. In the minor productions of poultry, 13million ducks, 1.4million geese and 5.0million turkeys were slaughtered in 2012. Local government Before 1970, local government in Denmark was carried out by a system of county council districts, boroughs, and parishes. Cogeneration plants are the norm in Denmark, usually with district heating which serves 1.7million households. By September 2018, 831,000 people worked in the general government sector, corresponding to 29.9% of all employees. In 2015, average household assets were more than 600% of their disposable income, among OECD countries second only to the Netherlands. While unemployment rates have soared across Europe, the official Polish figures have hardly budged, and are the lowest in the EU according to the latest Eurostat figures. Correcting for purchasing power, income was Int$52,390 or 16th-highest among the 187 countries. Significant investment has been made in building road and rail links between Copenhagen and Malm, Sweden (the resund Bridge), and between Zealand and Funen (the Great Belt Fixed Link). Following a monetary reform after the Napoleonic wars, the present Danish central bank Danmarks Nationalbank was founded in 1818. 2017: Fortsat fald i den offentlige finansielle nettogld. Another 2,000 people worked in fishing. Both of these industries are a major source of income and combined, they make up a quarter of all of Denmark's agricultural exports. Their ability to work will be re-evaluated by the municipality after 5 months of illness.[89][90]. Long-run annual fiscal projections from the Danish government as well as the independent Danish Economic Council, taking into account likely future fiscal developments caused by demographic developments etc. This flexicurity model allows for businesses to establish. Denmark is a high-income, modern society with state-of-the-art infrastructure and distribution systems, a highly skilled labor force, and a central location that makes it an excellent distribution point for the Scandinavian, Northern European, and Baltic markets. The OECD average was 34.2%. As it stands, Denmark is set to remain a member of the European Union in the near future, which should guarantee the country a strong Political and Economic foundation. Life expectancy in Denmark has increased from 77.9 years in 2005 to 80.6 years in 2015. Who has the number 1 healthcare in the world? Still, 80 to 85% of the population lived in small villages on a subsistence level. Danish Employers' Confederation was created in order to . They result from relatively high levels of social solidarity and taxation, alongside a political and economic system that preserves enterprise, economic autonomy and aspiration. a likely ageing of the population caused by a considerable expansion of life expectancy), consider the Danish fiscal policy to be overly sustainable in the long run. The electricity grids of western Denmark and eastern Denmark were not connected until 2010 when the 600MW Great Belt Power Link went into operation. As Denmark's "embassy to the EU", its main task is to ensure that the country's . On 6 February 2015 the certificates of deposit rate, one of the four official Danish central bank rates, was lowered to 0.75%. On the other hand, Denmark has had a logistic advantage through its long coastal line and the fact that no point on Danish land is more than 50 kilometers from the sea an important fact for the whole period before the industrial revolution when sea transport was cheaper than land transport. Statistikbanken.dk/10021:Befolkning og valg/(table)FOLK1AM, In this context, "self-sufficient" means that the domestic energy production is equal to the energy consumption in terms of, Economic and Monetary Union of the European Union, Danish Christmas Tree Growers Association, "World Economic Outlook Database, April 2019", "Report for Selected Countries and Subjects: April 2023", "The outlook is uncertain again amid financial sector turmoil, high inflation, ongoing effects of Russia's invasion of Ukraine, and three years of COVID", "Table NABP10: 12.1.1 Production and generation of income (10a3-grouping) by transaction, industry and price unit. Denmark's economy is strong and stable because Danish companies enjoy tax advantages, favorable guidelines concerning R&D and depreciation, competitive labor charges, balanced foreign trade, and high-skilled qualified workers. [98] Mink thrive in, but are not a native to Denmark, and it is considered an invasive species.

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