On the other hand, there is also a risk that foreign growth falls below expectations, with negative implications for the Danish economy. Obviously, some sectors are struggling more than others, but that is unavoidable in a constantly changing world. Focus should be on creating attractive framework conditions for output in Denmark. Viewed in isolation, weak wage increases improved competitiveness in 2012.
The recent strengthening of the effective krone rate has had the opposite effect, but nevertheless, the deterioration of Denmark’s competitiveness which occurred during the overheating in the 2000s is being rolled back by the market forces. With unemployment only slightly above its structural level, wage inflation has declined notably, and perhaps more than anyone had believed it would.