Economic trends
After strong growth in 2004-2006, the Danish economy slowed down in 2007, mainly because of the rise in interest rates and the shrinkage of the housing market, which contributed to depressing the consumers and consequently caused a reduction in investment. The country was strongly hit by the financial crisis due to its high degree of openness to international trade and to the high level of financialization of its economy. Domestic consumption demand decreased significantly in 2009. The number of bankrupt companies literally exploded (more than 60% over the period of 2008-2009), with the resulting unemployment practically doubling the unemployment rate over the same period.
Denmark's economy also suffers from relatively low productivity. The costs of employment are high but the number of working hours is low and there are many active adults receiving income benefits. Reforms in the past years have been aimed at promoting the human capital and encouraging late retirement.
Main branches of industry
The agricultural sector only accounts for almost 2% of the GDP. Nevertheless, Denmark has become one of the major exporters of agricultural products. Two-thirds of the agricultural production is exported. Most of the Danish land is used for agriculture and there are more than 50,000 farmers in Denmark. Nearly 90% of the country's agricultural revenue comes from livestock production.
Denmark has limited natural resources, a fact which slows down the development of its heavy industry. However, the country has enough oil and gas reserves to ensure its energy freedom. The major activity sectors are: chemical and pharmaceutical, biotechnology and services (approximately three-fourths of the GDP). Denmark is the world's leading manufacturer of wind turbines and exports 85% of its production.
The services sector contributes nearly three-fourths of the GNP. However, the country was heavily affected by the international crisis and the number of companies going bankrupt in this sector exploded in 2008-2009.
International trade
The trade balance deteriorated sharply in 2008, when high domestic demand led to an imbalance in favor of imports. Additionally, export earnings will no longer benefit from the high international oil prices (Denmark is a net exporter of oil and gas) because of the sharp drop of Brent prices. As a result, the trade balance and current account balance have remained in the red in 2009.
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