In recent months, Denmark has received substantial attention due to the appreciation pressure on the Danish krone. This Fact Book on Denmark gives a brief overview of the main aspects of the Danish economy.
Denmark is a small open economy and the Danish business cycle tracks that of the euro area.
The Danish economy is currently recovering but the recovery is weak and fragile.
Denmark has had a very tight fixed exchange rate system since 1982 (first against the Deutschmark and since 1999 against the euro) and the peg is a key element of economic policy in Denmark. Denmark will not leave the peg, as the peg is a political decision that enjoys full support from all political parties.
The Danish household debt situation attracts attention from time to time but the significant gross debt is financed domestically as the debt accumulation is largely a consequence of significant gross pension savings combined with a low cost and flexible mortgage system.
Public finances are sound.
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