Danish central bank to cut 2025 growth forecast, governor says

Danish central bank to cut 2025 growth forecast, governor says

The Danish central bank has announced a significant revision to its 2025 economic growth forecast, reducing it to 1.4% from the previously projected 3%. This downward adjustment is primarily attributed to weaker expectations for pharmaceutical exports, particularly from Novo Nordisk, the country's leading pharmaceutical company [1].

The Danish economy ministry cited several factors contributing to the revision, including higher U.S. tariffs and a slowdown in the rapid growth of Novo Nordisk. The company, known for its blockbuster diabetes and weight-loss treatments, Ozempic and Wegovy, has faced increased competition in the weight loss drug market and a rise in generic medicines, which are squeezing its sales opportunities in the U.S. [2].

The ministry noted that Denmark's U.S. exports fell significantly in early 2025 following a huge spike in late 2024, due to both inventory build-up and increased competition. Pharmaceuticals are now expected to contribute just 1.3 percentage points to Denmark's goods exports growth this year, down from 8.1 percentage points in 2024. Total goods export growth is projected to fall to 2.7% in 2025 from 10.5% the previous year [1].

Despite the lower 2025 growth forecast, the Danish economy ministry stressed that the economy remains strong overall, with high employment and inflation expected to be below 2% on an annual basis. The ministry also revised its growth forecast for 2026 higher, to 2.1% from 1.4%, on expectations for higher private and public consumption [1].

Novo Nordisk has faced significant challenges in recent years, including share price falls of over 10% in 2024 and more than 40% in the year to date. The company's earnings remain robust, with the drugmaker reporting 67% year-on-year sales growth at constant exchange rates of 19.53 billion Danish kroner ($3.03 billion) in quarterly results published earlier this month [2].

The Danish central bank's decision to cut the 2025 growth forecast reflects the broader economic challenges faced by the country, particularly those related to its reliance on pharmaceutical exports and the impact of U.S. tariffs. However, the revised forecast also highlights the potential for recovery in the coming years, driven by expectations of higher private and public spending.

References:
[1] https://www.cnbc.com/2025/08/29/denmark-slashes-2025-growth-forecast-amid-novo-nordisk-slowdown-.html
[2] https://www.reuters.com/world/europe/novo-nordisk-woes-prompt-denmark-slash-countrys-2025-growth-forecast-2025-08-28/