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Fast Comment DenmarkExports disappoint again

  1. Exports of goods fell 0.4 percent m-o-m in February; fourth month in a row without improvement
  2. Imports of goods fell 3.4 percent m-o-m; surplus on the trade balance picked up from DKK 5.6bn to 7.0bn
  3. Disappointing that exports do not appear to be benefiting more from improvement in global economy
Exports are still spluttering
Exports of goods excluding ships, planes and fuel fell by 0.4% m-o-m in February, which was only slightly better than our forecast of a 1.0% drop. This marked the fourth consecutive month without an improvement in exports, which is definitely disappointing, given the apparent strength of the global economy in the same period. It is true that global growth seems to have lost some momentum lately, and the trade-weighted DKK has strengthened, but it is a bit of a concern that this important demand driver is showing such muted progress. Imports of goods also declined markedly in February, and the 3.4% monthly drop was bigger than our forecast of a 2% fall. Even though this is positive for the external balance (the surplus on the trade balance increased from DKK 5.6bn to DKK 7.0bn), it also indicates a risk of a slowdown in internal demand.
Weak contribution from trade in Q1
The upshot is that it does not seem as though exports of goods will contribute much to overall economic growth in Q1. Smoothing out the volatility in the figures reveals a drop in the export of goods of 1.5% in the period from December to February compared to the previous three months period, while imports were flat in the same period. Looking ahead, we continue to expect exports to do better, given the decent growth picture, especially in the eurozone, but as mentioned, we are disappointed that the synchronised improvement in the global business cycle has not led to a more marked improvement in exports so far. Note that the negative developments over the past three months were driven by a drop in exports to Europe. With some weaker signals from debit card turnover and industrial production, the current picture is that the Danish economy only saw very moderate GDP growth in Q1.


Jes Asmussen

Chief Economist Denmark

Denmark and The Netherlands

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