Denmark Raises Growth Forecast as Novo Nordisk Increases Production - Latest Global News

Denmark Raises Growth Forecast as Novo Nordisk Increases Production

(Bloomberg) — The Danish government now forecasts the economy will grow 2.7% this year, nearly twice as fast as previously estimated, accelerated by the Scandinavian country’s thriving pharmaceutical company, Novo Nordisk A/S.

Most read by Bloomberg

The Economy Ministry raised its forecast for gross domestic product growth in 2024 from a December estimate of 1.4%. In 2025, GDP is expected to increase by 1.8%, compared to 1% previously.

Pharmaceuticals and extractive industries, including the reopening of the Tyra North Sea gas field, will be key drivers of economic growth, the ministry said in its spring economic report. Without these two sectors, Danish GDP would only grow by 1.6% this year and by 1% in 2025.

Danish drugmaker Novo Nordisk’s growth is particularly strengthening Danish exports, the ministry said, raising its export growth forecast for Denmark this year to 7% from 4.2% last year. Novo’s efforts to expand production capacity would also boost near-term construction investments, it said.

Read: Ozempic maker Novo Nordisk has captivated Denmark’s economy

Novo is ramping up production of its blockbuster diabetes drug Ozempic and weight loss drug Wegovy to meet excessive demand and investing in new and existing production facilities. The success of these drugs has made Novo the most valuable company in Europe and has been a major driver of Danish economic growth in recent years, raising fears about the small country’s dependence on the drug maker.

“It is an absolute rarity that the government is revising the forecast upwards so significantly,” said Tore Stramer, chief economist at the Danish Chamber of Commerce. The move reflects that Novo has seen “a surprisingly strong increase in production in late 2023 and into 2024,” he said.

Read: Novo’s weight loss medications are very popular with Denmark’s Prime Minister

Last year, Denmark’s economy grew 1.9% but would have stagnated without Novo’s contribution. According to the Chamber of Commerce, the drugmaker was also responsible for a fifth of all new jobs created in Denmark in 2023.

Denmark’s Prime Minister Mette Frederiksen said earlier this week that she was a “big fan” of Ozempic and Wegovy and openly expressed her support for the pharmaceutical giant as it faces increasing criticism over pricing in the United States.

The new forecast comes after the government on Wednesday lowered its estimate for the Nordic country’s financing needs this year.

Most read by Bloomberg Businessweek

©2024 Bloomberg LP

Sharing Is Caring:

Leave a Comment