This year’s growth will be insufficient to halt the increase in unemployment. The corporate sector has considerable spare capacity, and unemployment is expected to rise for yet another year. Denmark is a small open economy, and about one job in four is related to exports, directly or indirectly.
Wage competitiveness therefore plays an important role in the Danish economy, and the crisis has resulted in weak export markets and hence weak selling opportunities. Erosion of wage competitiveness has led to loss of market shares. The loss has been quite substantial relative to those of many comparable countries.