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Danish Retail Sales Improve

James Boston
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Danish Retail Sales Improve

The Danish consumer sector is strengthening according to the latest August data released this morning. Retail Sales have displayed a year on year pick up of 1.1% compared to a revised figure of just 0.7% in July, expectations however were for something closer to 2.0% growth. Month on month the Danish retail sales number expanded to 0.6% from 0.0% in July, this topped the expected figure of 0.3%.

Despite the growing Retail Sales statistics, there has been a measureable fall off in Consumer Confidence according to September’s data. The latest reading is showing 7.1, which is well down on the prior month’s 11.4 level, there were no expectations that the number would change this month.

The fall in the Consumer Confidence index brings to an end a six month run of improvements in this area. This is not altogether surprising given the weakening nature of the Danish economy. Denmark is trailing it’s Scandinavian neighbours in terms of economic growth, it’s proximity and ties to Eurozone economies may be holding it back as is a weakening export market, particularly exports to Russia which have been curtailed due to the recent sanctions. The Danish economy actually contracted by -0.3% in the second quarter of this year, this surprised economists that had been anticipating growth, albeit moderate, of 0.3%. It now looks highly unlikely that the Government will hit it’s full year growth forecast of 1.6% as this would require something in the region of 5% expansion in the second half of the year. Also in jeopardy is the 2015 growth forecast figure of 2.0%.

In spite of the faltering economic performance of this economy, the foundations still remain solid, Denmark’s low debt/GDP ratio of 45% offers some headroom for a fiscal stimulus if necessary, while the near full employment situation is ensuring no over stretching of the central finances.

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