Denmark: Labour shortages
GDP has expanded strongly during 2006 and is now well above potential. With a continuing housing boom and strong external demand, labour shortages have become very clear. Domestic firms are losing market share, and wages have started to accelerate, in particular in the construction sector.
Although short-term interest rates are rising, monetary conditions are still too stimulative, making more critical the need to avoid fiscal slippages in 2007. Efforts to expand labour supply should continue, and measures to cool down aggregate demand should be ready in case wages and prices start overheating.
|Population (000s), 2005||5 416|
|Area (000 sq km)||43|
|GDP (Billion USD), 2005||186.3|
|Life expectancy at birth (Women, Men), 2004 ||79.9, 75.2|
|Total labour force (000s), 2005||2 876|
|Government type||Constitutional Monarchy|
|Indicators||% change unless otherwise indicated|
|Household savings ratio||-2.2||-1.1||-0.9|
|Consumer price index||2.0||2.1||2.6|
|Unemployment rate (%)||3.8||3.3||3.3|
|General government financial balance|
|Current account balance (% GDP)||1.3||1.8||1.3|
No. 258/259, December 2006