Denmark cuts its 2026 economic growth forecast to 1.4%
Ministry cuts 2026 GDP forecast to 1.4% from 1.7%
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Says US tariffs, trade tensions create uncertainty
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Ministry sees 3% growth this year, up slightly from previous forecast
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Pharma cos' investment in U.S. production will help shield Danish exports
(Adds detail on forecasts in paragraph 1-3 and effect from tariffs in paragraph 4)
COPENHAGEN, May 20 (Reuters) - Denmark lowered its economic growth forecast for 2026 on Tuesday and flagged uncertainty caused by U.S. tariffs and trade tensions.
The economy ministry said it now expects Denmark's GDP to grow by 1.4% in 2026, down from 1.7% seen in December, while its projection for 2025 was raised slightly to 3.0% from 2.9% previously.
"It remains to be seen, how high the tariff increases will end up being, but uncertainty and a drop in confidence alone dampen investment and consumption," Economy Minister Stephanie Lose said in a statement.
The pharmaceutical industry alone is expected to contribute 1.1 percentage points to GDP growth in 2025 and 0.6 percentage points in 2026, while the Tyra gas field in the North Sea is expected to add around 0.5 percentage points in 2025, the ministry said.
Investment by pharmaceutical companies including Novo Nordisk to expand production facilities in the United States would shield some Danish exports from U.S. President Donald Trump's sweeping tariffs, and support growth, the ministry said.
The Danish economy has benefited from the rapid expansion of Novo Nordisk, maker of the hugely popular Wegovy weight loss drug and the Ozempic diabetes treatment, at a time when much of Europe has seen slow growth or stagnation. (Reporting by Louise Breusch Rasmussen, editing by Jacob Gronholt-Pedersen, Stine Jacobsen and Susan Fenton)
