why is denmark's economy so good

In October 2018, 4.8% of the Danish labour force were unemployed, as compared to an average of 6.7% for all EU countries. [14] As value added per person is relatively low, the share of national value added is somewhat lower. Since 2012, calculations of future fiscal challenges, from both the government and independent analysts, have generally perceived Danish fiscal policy to be sustainable. Website of Danmarks Nationalbank, published 21 February 2014 with updates April 2017, retrieved 28 November 2018". The most notable companies include: Many of the largest food producers are also engaged in biotechnology and research. Best Healthcare in the World 2021 Country LPI 2020 Ranking CEO World Ranking Denmark 1 3 Norway 2 15 Switzerland 3 18 Sweden 4 28. Inflation under 2% is in green.[129]. Correcting for purchasing power, income was Int$52,390 or 16th-highest among the 187 countries. is a net exporter of food, oil, and gas and enjoys a . 10 EU member countries had a lower unemployment rate than Denmark in 2017. The labour market is also traditionally characterized by a high degree of flexicurity, i.e. Sick people can receive some financial support throughout the extent of their illness. Slovakia, Slovenia, Czechia, Finland, Belgium and the Netherlands had a lower Gini coefficient for disposable income than Denmark. From 2017/18 this is no longer considered to be the case, and attention has been redirected to the need of avoiding a potential overheating situation. The import of organic products has always been higher than the exports though and reached DK 3.86billion in 2017. [27], The Danish labour market is characterized by a high degree of union membership rates and collective agreement coverage dating back from Septemberforliget (The September Settlement) in 1899 when the Danish Confederation of Trade Unions and the Confederation of Danish Employers recognized each other's right to organise and negotiate. Jacob Isaksen, Uffe Mikkelsen and Peter Beck Nellemann (2012): Arbejdsmarkedsreformer i Danmark og Tyskland. By Nima Sanandaji, the director of the European Centre for Entrepreneurship and Policy Reform. English Summary, p. 341", "Household wealth and debt. The nominal gross national income per capita was the ninth-highest in the world at $68,827 in 2023. Private vehicles are increasingly used as a means of transport. The main railway operator is Danske Statsbaner (Danish State Railways) for passenger services and DB Schenker Rail for freight trains. According to data from Statistics Denmark, the Gini coefficient for disposable income has increased from 22.1 in 1987 to 29.3 in 2017. [112] Denmark had the 6th best energy security in the world in 2014. Finanspolitisk holdbarhed. In 2012, the Danish parliament passed a Budget Law (effective from January 2014) which governs the over-all fiscal framework, stating among other things that the structural deficit must never exceed 0.5% of GDP,[72] and that Danish fiscal policy is required to be sustainable,[73] i.e. All Danish citizens above 18 years of age can apply for some financial support if they cannot support themselves or their family. The leading United States exports to Denmark are industrial machinery, capital equipment, computers and telecom products, software, aircraft, and scientific instruments. [81] The all-record highest Danish tax level was 49.8% of GDP,[81] reached in 2014 because of high extraordinary one-time tax revenues caused by a reorganization of the Danish-funded pension system. This system requires a paying membership of a state-recognized unemployment fund. There exists national accounting data for Denmark from 1820 onwards thanks to the pioneering work of Danish economic historian Svend Aage Hansen. Denmark is ranked 6th out of 44 . Secondly, compulsory funded pension schemes became normal for most employees from the 1990s. The reasons that make Denmark's economy so successful are a very developed infrastructure, an efficient workforce and an advanced welfare system. As Denmark's "embassy to the EU", its main task is to ensure that the country's . [112], Since 2000, Denmark has increased gross domestic product (GDP) and at the same time decreased energy consumption. Date 9 February 2015. This accounts for almost half of all agricultural exports and for more than 5 percent of Denmark's total exports. This drastic change was initially inspired largely by the discovery of Danish oil and gas reserves in the North Sea in 1972 and the 1973 oil crisis. ", "Report for Selected Countries and Subjects", "Statistik for registrede andelsboligforeninger p andelsboligforeninger.com [Statistics for registered housing cooperatives at andelsboligforeninger.com]", Danmarks Nationalbank central bank of Denmark, Bureau of Public Affairs, U.S. Department of State, country overview for Denmark, World Bank Summary Trade Statistics Denmark, Dansk Arbejdsgiverforening Confederation of Danish Employers, Landsorganisationen i Danmark The Danish Confederation of Trade Unions, Anvendt Kommunal Forskning Danish Institute of Governmental Research, The Danish National Centre for Social Research, De konomiske Rds sekretariat Danish Economic Councils. Kvartalsoversigt, 3. kvartal 2012, del 1. Finland has been the world's happiest country for four years running; Denmark and Norway hold all but one of the other titles (which went to Switzerland in 2015). In 2000, the Danish government advocated Danish EMU membership and called a referendum to settle the issue. [49] Its labour market policies are decided through tripartite cooperation between employers, employees and the government. [64], After having almost consistently an external balance of payments current account deficit since the beginning of the 1960s, Denmark has maintained a surplus on its BOP current account for every year since 1990, with the single exception of 1998. [42], The Danish currency is the Danish krone, subdivided into 100 re. In the Danish mixed welfare-state economy, private sector expenditures account for more than half of the net national income. English Summary, p. 297", "Danish Economic Councils. In 2017, the share was at 13.3%, accounting for a total of DKK 12.1billion. Uniform commercial legislation in the Nordic countries dates to the 19th century. Danish income taxes are based on a progressive tax system, so if you make more than 61,500 euros (about $67,000) per year, an additional tax rate of 7 percent is added over this threshold . The SME portal of the State Secretariat for Economic Affairs, SECO Since February 2015, the central bank has maintained a negative interest rate to contain an upward exchange rate pressure. On top of this, Danes pay a 25 % value-added tax on most items, and a tax of up to 150 % on new cars. Denmark's standard of living is among the highest in the world with a GDP per capita of $67,196 in 2021. Maintenance of the fixed exchange rate is the responsibility of Danmarks Nationalbank, the Danish central bank. Danish dairy farmers are among the largest and most modern producers in Europe. [72], Danish fiscal policy is generally considered healthy. The tax level as well as the government expenditure level in Denmark ranks among the highest in the world, which is traditionally ascribed to the Nordic model of which Denmark is an example, including the welfare state principles which historically evolved during the 20th century. American Mink are now widespread in Denmark and continues to cause problems for the native wildlife, in particular waterfowl. This places unemployment in Denmark somewhat below the EU average, which was 7.6%. [97] Approximately 98 percent of the skins sold at Kopenhagen Fur Auction were exported. 1401 Constitution Ave NW domestic inflation or unemployment rates. The Budget Law also assigned the role of independent fiscal institution (IFI, informally known as "fiscal watchdog"[74]) to the already-existing independent advisory body of the Danish Economic Councils. In 2012, 100million chickens were slaughtered. [69] Danmarks Nationalbank reacted in various ways, chiefly by lowering its interest rates to record low levels. The Scandinavian country's unemployment rate now stands at an incredibly low 4.3 per cent, which basically means that anyone who is willing and able to work is working. Offentligt kvartalsregnskab 4. kvt. Denmark, and to a lesser extent the other Nordic countries, are surfacing in the Democratic debates as examples of relatively equal societies that provide generous benefits for their citizens,. This is the conclusion drawn by Danmarks Nationalbank in a projection for the Danish economy, in which the gross domestic product (GDP) is forecast to increase by 3.3 per cent. [77] The gross EMU-debt as percentage of GDP was the sixth-lowest among all 28 EU member countries, only Estonia, Luxembourg, Bulgaria, the Czech Republic and Romania having a lower gross debt. This increase was attributed to both a larger spread in gross incomes and various economic policy measures. [121], Denmark is a long-time leader in wind energy and a prominent exporter of Vestas and Siemens wind turbines, and in 2019 Denmark's exports of wind-turbine technology and services amounted to 8.9 billion. "Nej"-sidens forspring skrumpet en smule. Retrieved on 28 November 2018", "Table VEJ11: Road network 1 January by part of the country and type of road. De konomiske Rds Sekretariat. A study published earlier this year reveals the average carbon footprint for households in EU countries, and the news is not good for those of us in Denmark. [25], During the last three decades household saving rates in Denmark have increased considerably. Eurostat, last data update 20 November 2018, retrieved 28 November 2018", "Minimum Wage in Denmark Frequently Asked Questions", "Ingrid Henriksen: An Economic History of Denmark. Arbejdernes Landsbank, founded in 1919, is the largest bank cooperative and it is currently the 6th largest bank in the country as of 2018. Nowadays, it is of minor economic importance. [26], In international comparisons, Denmark has a relatively equal income distribution. Kapitel III i De konomiske Rds Formandskab: Dansk konomi, efterr 2016. This is to a large extent caused by two major institutional changes: A series of tax reforms from 1987 to 2009 considerably reduced the effective subsidization of private debt implicit in the rules for tax deductions of household interest payments. In comparison to Americans, Danes work considerably less. Indkomstudvikling og -fordeling i Danmark 19832005. Danmarks Nationalbank. expenditure another 3.4% of GDP. [92], Agriculture was once the most important industry in Denmark. In recent years, it was considered overly sustainable. After some years of stagnation, close to 10% of the cultivated land is now categorized as organically farmed, and 13.6% for the dairy industry, as of 2017. The economy is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture. Whereas in 1980 annual inflation was more than 12%, in the period 20002017 the average inflation rate was 1.8%. Public expenditure is directed primarily toward health and social services, education, economic affairs, foreign affairs, and national defense. [102], Denmark is also a large exporter of pumps, with the company Grundfos holding 50% of the market share, manufacturing circulation pumps. Why do the Danes score so highly on international happiness surveys? [53] This includes mandatory activation for those unemployed under the age of 30. The flexicurity of labor market flexibility alongside the security of a strong social safety net helps adjust to shocks while limiting the social cost of unemployment and the risk that it could become entrenched. Government net debt was close to zero at the end of 2017, amounting to DKK 27.3billion, or 1.3% of GDP. Fur ranked as Danish agriculture's third largest export article, at more than DKK 7billion annually. 2. Denmark supports a high standard of livingits per capita gross national product is among the highest in the worldwith well-developed social services. Date 6 July 2012. Instead of creating policies where the rich can get richer at the expense of the poor, everyone tends to earn about the same amount. Chickens for slaughter are often produced in units with 40,000 broilers. English Summary", "SKTRYK: Tax level by national account groups", "LBESK02: EMPLOYEES (MONTH) BY SECTOR (2-GRP)", "Introducing Masters Unemployment Insurance Fund", "konomisk tilskud fra kommunen [financial support from the municipality]", "Sygedagpenge [Social benefits for the sick]", "F overblikket over dagpengereformen [Get an overview of the unemployment benefit reform]", "Table BDF11: Farms by region, unit, type of farms and area. In 1994 active labour market policies were introduced that via a series of labour market reforms have helped reducing structural unemployment considerably. On Sept. 10, Danish authorities lifted all pandemic restrictions and pronounced that covid-19 is no longer a " critical threat " in the country. Denmark. Unlike most of its neighbours, Denmark has not had extractable deposits of minerals or fossil fuels, except for the deposits of oil and natural gas in the North Sea, which started playing an economic role only during the 1980s. More than half of the cows live in new loose-housing systems. [6] The sector is very capital-intensive, so the share of employment is much lower: About 2,000 persons worked in the oil and gas extraction sector in 2016, and another 1,000 persons in extraction of gravel and stone, or in total about 0.1% of total employment in Denmark.[14]. Rising inflation led to Denmark declaring a more consistent fixed exchange-rate policy in 1982. Export of dairy products accounts for more than 20 percent of the total Danish agricultural export. This makes the conduct of stabilization policy fundamentally different from the situation in Denmark's neighbouring countries like Norway, Sweden, Poland and the United Kingdom, in which the central banks have a central stabilizing role. Denmark supports a high standard of livingits per capita gross national product is among the highest in the worldwith well-developed social services. Consequently, the Danish krone is the only currency in the European Exchange Rate Mechanism II (ERM II). Denmark ranks 6 th out of 39 countries, whilst the US ranks 35 th. There is an emphasis on achieving a desirable work-life balance. Both of these industries are a major source of income and combined, they make up a quarter of all of Denmark's agricultural exports. DKK. Of these, 565,000 were dairy cows and 99,000 were suckler cows. . Unemployment by sex and age annual average. From danmarkshistorien.dk, Aarhus University. [19], As the annual current account is equal to the value of domestic saving minus total domestic investment, the change from a structural deficit to a structural surplus is due to changes in these two national account components. For example, unemployment benefits decrease by 50% after 6 months. American-owned firms play an important role in Denmark. health care, child care and education services). Denmark is a long-standing member of the European Union; as such, it benefits from numerous trade (and other) policies which help to significantly boost the country's economy. Its score is 0.4 point lower than last year. Life expectancy in Denmark has increased from 77.9 years in 2005 to 80.6 years in 2015. Who has the number 1 healthcare in the world? U.S. Department of Commerce Disabled people can apply for permanent social pensions. [120] As of 2015[update], Denmark has no environment tax on electricity. transport equipment): 24.2%, Miscellaneous Manufactured Articles: 17.8%, Live animals, food, beverages, and tobacco: 13.8%, Services (2021) - Main imports (% of total services imports), Telecommunications, computer and information services: 11%, Goods - Main Imports (% of total goods imports), Machinery (excl. Amager Bakke is an example of a new incinerator. Economie suisse, umbrella organisation for the Swiss economy. Date 2 November 2015. In 2017, the official Danish tax level amounted to 46.1% of GDP. Municipalities in principle independently levy income and property taxes, but the scope for total municipal taxation and expenditure is closely regulated by annual negotiations between the municipalities and the Finance Minister of Denmark. Denmark is famous for exporting milk and pork to European countries. The economy of Denmark is a modern mixed economy with comfortable living standards, a high level of government services and transfers, and a high dependence on foreign trade. The Copenhagen Malm Port was also formed between the two cities as the common port for the cities of both nations. Denmark ranks 10th most competitive economy in the world, according to the World Economic Forum's Global Competitiveness Report 2018. In 2020, Poland's GDP contracted by "only" 3.5%, significantly less than the OECD average of 5.5%. Denmark has a very long tradition of adhering to a fixed exchange-rate system and still does so today. According to the CIA World Factbook, Denmark had the twentieth-lowest Gini coefficient (29.0) of 158 countries in 2016. The largest share of U.S. investments goes to the software, information, and communications sectors. [6] Despite this, Denmark is still home to various types of agricultural production. Personal income transfers (for e.g. Retrieved on 28 November 2018". Top Personal Income Taxes. Both countries receive an annual fiscal subsidy from Denmark which amounts to about 25% of Greenland's GDP and 11% of Faroese GDP. They spend about 11 percent of their GDP on health care. About 4,200 farmers produce 28million pigs annually. Why is Denmark so successful? The total number of cattle in 2011 was approximately 1.5million. Olga Kovitidi, a so-called "senator from Crimea", quoted by The Insider Quote from Kovitidi: "About the attack by a Ukrainian Armed . Correcting for purchasing power, per capita income was Int$57,781 or 10th-highest globally. [42] Over the years, the wealth of the Danish pension funds have accumulated so that in 2016 it constituted twice the size of Denmark's GDP. The first of the Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden) to do so, Denmark joined the European Economic Community (EEC; ultimately succeeded by the European Union [EU]) in 1973, at the same time as the United Kingdom, then its most important trading partner. A second national accounts release confirmed the economy dodged a sequential contraction in Q4 as GDP expanded 0.9%. Of these, 20.9million are slaughtered in Denmark. [26] In 2017, Denmark had the seventh-lowest Gini coefficient (a measure of economic inequality) of the then 28 European Union countries. Website of Danmarks Nationalbank, retrieved 25 November2018", "Table PRIS112: CONSUMER PRICE INDEX (2015=100) BY MAIN FIGURES. Since the 19th century Denmark has gone through an intense technological and institutional development. It was ultimately a challenge to fiscal sustainability from demographic development, in particular higher longevity. Denmark has one of the lowest income inequality rates in the world. Denmark, Norway, and Sweden shouldn't be held up as socialist utopias. [107], Denmark has changed its energy consumption from 99% fossil fuels (92% oil (all imported) and 7% coal) and 1% biofuels in 1972 to 73% fossil fuels (37% oil (all domestic), 18% coal and 18% natural gas (all domestic)) and 27% renewables (largely biofuels) in 2015. Whereas Denmark's neighbours like Norway, Sweden, Poland and the United Kingdom generally follow inflation targeting in their monetary policy, the priority of Denmark's central bank is to maintain exchange rate stability. The total participation rate for people aged 15 to 64 years was 78.8% in 2017. TheInternational Trade Administration,U.S. Department of Commerce, manages this global trade site to provide access to ITA information on promoting trade and investment, strengthening the competitiveness of U.S. industry, and ensuring fair trade and compliance with trade laws and agreements. There are more than 550 American subsidiaries established in Denmark and a strong American Chamber of Commerce with approximately 240 members. The economy of Denmark has grown to become a modern day market economy that possesses an advanced industrial sector alongside its traditional and now high-tech agricultural sector. Denmark has fostered and is home to many multi-national companies. On 6 February 2015 the certificates of deposit rate, one of the four official Danish central bank rates, was lowered to 0.75%. Why is the Netherlands Economy so Rich? Denmark 's top statutory personal income tax rate is 55.9 percent, Norway 's is 38.4 percent, and Sweden 's is 57.1 percent. But, in fact, Denmark, separated from Sweden by a bridge, has been far more successful: Denmark's death rate from Covid-19 per million people is less than one-third of Sweden's, and . Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching . CEPOS Think Tank for a liberal economy and limited Government etc. Foreign trade increased heavily relative to GDP. In the minor productions of poultry, 13million ducks, 1.4million geese and 5.0million turkeys were slaughtered in 2012. [43] The pension wealth consequently is a very important both for the life-cycle of a typical individual Danish household and for the national economy. [14] Main sub-industries are manufacture of pharmaceuticals, machinery, and food products. New cars are taxed by means of a registration tax (85% to 150%) and VAT (25%). Denmark invests heavily in active labor market policies and the concept of flexicurity has been important historically. According to the World Bank, gross national income per capita was the tenth-highest in the world at $55,220 in 2017. [91] Halving the time unemployment benefits can be received from four to two years, and making it twice as hard to regain this right, was implemented in 2010 for example. [79], Denmark has an unemployment insurance system called the A-kasse (arbejdslshedskasse). 2017: Fortsat fald i den offentlige finansielle nettogld. Here's the first and most important reason the Danes enjoy such a high quality of life: because of the welfare state and an otherwise activist government that attempts to govern in the interest. Well, they do have high levels of trust and social cohesion, and do very nicely from industrial pork products, but according. It's Scandinavia's most cost-efficient location with favourable business conditions. The economy of Denmark is a modern mixed economy with comfortable living standards, a high level of government services and transfers, and a high dependence on foreign trade. Copenhagen has a small Metro system, the Copenhagen Metro and the greater Copenhagen area has an extensive electrified suburban railway network, the S-train. Small enterprises are dominant. "Danish Economic Council: Economy and the Environment 2017. Denmark's small open economy is highly dependent on foreign trade, and the government strongly supports trade liberalization. Trade in goods made up slightly more than 60% of both exports and imports, and trade in services the remaining close to 40%. Danish Employers' Confederation was created in order to . Denmark's economic freedom score is 77.6, making its economy the 9th freest in the 2023 Index. [45] However, inequality has increased during the last decades. [78] Denmark had a government budget surplus of 1.1% of GDP in 2017.[78]. You Will Work Less. USA.gov|FOIA|Privacy Program|EEO Policy|Disclaimer|Information Quality Guidelines |Accessibility, Official Website of the International Trade Administration, Comply with U.S. and Foreign Export Regulations. [50] Denmark has one of the highest expenditures on ALMPs and in 2005, spent about 1.7% of its GDP on labour market policies. Peter Bejder and Benjamin Kristensen: Merkantilisme og danske tropekolonier, ca. Other important U.S. exports to Denmark are military equipment, chemicals and pharmaceuticals, tobacco, wine, fresh vegetables, nuts, and forest products. There are also income transfers to various groups, such as retired or disabled people, unemployed persons, students, etc. The Kingdom of Denmark also includes Greenland and the Faroe Islands. Yet the Nordic. Denmark's death toll per million citizens over the course of the pandemic is just 22 percent of the U.S.'s, and daily deaths there have fallen to under 10. [100], Denmark has the highest retail consumption share for organic products in the world. Denmark is a high-income, modern society with state-of-the-art infrastructure and distribution systems, a highly skilled labor force, and a central location that makes it an excellent distribution point for the Scandinavian, Northern European, and Baltic markets. People living in Denmark pay some of the world's highest taxes - up to half of their income. Approval is not automatic, and the extent of this system has generally been diminished since the 1980s.

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