Momentum in the Danish economy is presumably so strong that a gradual increase in short-term interest rates to a more normal level is unlikely to trigger an economic reversal, although it will, viewed in isolation, have a dampening effect. The positive outlook is supported by developments in the labour market. Gross unemployment had been flat for a while, but fell by 3,000 in February.
It is probably too optimistic to expect similar declines in the coming months, but the figures do indicate that unemployment has peaked at a considerably lower level than previously expected. Right now it is only slightly above its structural level. So there is no need to ease fiscal policy relative to the plans laid down for the next couple of years.