Denmark's Growth Forecast Doubles to 2.7%, Novo Expands

Denmark's economic growth forecast jumps to 2.7% for the year, driven by Novo Nordisk's expansion and Tyra gas field reopening.

By Athena Xu

5/16, 09:40 EDT
Novo Nordisk A/S

Key Takeaway

  • Denmark's economic growth forecast for the year has been doubled to 2.7%, driven by Novo Nordisk's expansion and the Tyra gas field reopening.
  • Novo Nordisk, pivotal in this growth, is expanding due to high demand for its diabetes and weight-loss drugs, significantly impacting job creation.
  • Despite concerns over economic dependency on Novo Nordisk, Prime Minister Frederiksen supports the company amid its pricing strategy scrutiny in the US.

Economic Growth Forecast Doubled

Denmark's government has significantly revised its economic growth forecast for the year, now expecting the economy to expand by 2.7%, a notable increase from the previously estimated 1.4%. This upward adjustment is largely attributed to the robust performance of the pharmaceutical sector, spearheaded by Novo Nordisk A/S, and the reopening of the Tyra North Sea gas field. The revised forecast positions Denmark as potentially the fastest-growing economy within the G-10 group of major currency holders for the year, according to data compiled by Bloomberg. The economy ministry also anticipates growth to continue into 2025, with GDP expected to rise by 1.8%, up from the 1% forecasted earlier.

Novo Nordisk's Pivotal Role

The Danish pharmaceutical giant Novo Nordisk is at the forefront of this economic surge, thanks to its successful diabetes treatment Ozempic and weight-loss medicine Wegovy. The company is expanding its production capacity to meet the soaring demand for these drugs, which has also spurred growth in the construction and machinery sectors due to increased investments. Novo Nordisk's ascendancy to become Europe’s most valuable company underscores its significant contribution to Denmark's economy, including being responsible for a fifth of all new jobs in the country in 2023. However, this dependency on a single company has raised concerns about the sustainability of Denmark's economic growth.

Support Amid Criticism

Prime Minister Mette Frederiksen expressed her admiration for Novo Nordisk's products, Ozempic and Wegovy, amidst growing scrutiny of the company's pricing strategies in the United States. Her endorsement comes at a time when the pharmaceutical industry faces global challenges, including pricing pressures and regulatory scrutiny. The government's backing highlights the importance of Novo Nordisk to the Danish economy, not just as a revenue generator but also as a key employer.

Street Views

  • Tore Stramer, Danish Chamber of Commerce (Bullish on Denmark's economy):

    "It’s an absolute rarity that the government makes such a significant upward adjustment of the forecast. The move reflects that Novo has undergone a surprisingly strong production increase at the end of 2023 and into 2024."