Uddrag fra Danske Bank analyse
Solid platform for increasing defence spending The government aims to increase defence spending by DKK25bn (0.8% of GDP) in both 2025 and 2026, followed by DKK10bn per year thereafter. This comes on top of the already planned loosening of fiscal policy. Despite this, we continue to expect a significant government surplus with the potential to finance more temporary expenses without compromising the sustainability of government finances. Government coffers are essentially robust after five years with the EU’s largest budget surplus relative to GDP (the figures for 2024 are not yet available) and government net financial assets that surpass 20% of GDP. That being said, a permanent increase in defence spending from, for example 2% to 3% of GDP, will likely require a degree of financing in the form of tax increases or cutbacks when other political priorities have to be considered.
Looking ahead, the continuing solid growth expected in pharmaceutical exports should lift the surplus further together with the full reopening of the Tyra field in January, which will once again make Denmark a net exporter of gas. In our view, these are weighty arguments for why we can expect to see more very large current account surpluses in the coming years. Pulling in the opposite direction, however, is the latest normalisation of freight rates, which will make shipping less profitable, and the government’s planned investments in Denmark’s defence capabilities, which will inevitably involve substantial imports.
