Denmark Proposes Increased Public Spending Amid Robust Economic Forecast

Denmark's government has proposed raising public spending on welfare and defense in 2025, owing to robust economic growth and low inflation forecasts. This move, however, defies the Danish Economic Council's recommendations to tighten budgets. The Danish economy is benefiting from Novo Nordisk's rapid expansion.

Denmark's government on Friday recommended an increase in public spending on welfare and defense in 2025, citing strong economic growth and low inflation projections for this year and the next. This recommendation contrasts with the Danish Economic Council's advice to tighten budgets.

Driven by the rapid expansion of drugmaker Novo Nordisk, Denmark's economy is experiencing a positive trajectory, in contrast to several major European economies facing stagnation. The government revised its growth forecast for 2024, adjusting it to 1.9% from an earlier 2.7%.

Within the budget bill for 2025, the government highlighted that increased public spending could stimulate the economy by an additional 0.5 percentage points. This announcement coincides with near record-high employment rates in Denmark. The projected employment figures for this year and next have also been increased.

Despite the optimistic economic indicators, the government's decision to boost spending has sparked debate, with the Danish Economic Council advising more conservative fiscal policies.

(With inputs from agencies.)