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Latest economic figures a disappointment
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August 31st, 2014
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Economists say things are stuck in reverse
The economy is going backwards. According to new figures from Danmarks Statistik, the gross domestic product (GDP) fell 0.3 percent in the second quarter.
“The GDP is the godfather of economic indicators. When it goes down, there is good reason to be worried,” Thomas Søby, the chief economist at the agriculture and food council Landbrug & Fødevarer, told Jyllands-Posten.
“Unfortunately we have seen a number of negative trends over the summer.”
READ MORE: Economy warming up, according to minister
Søby said the government’s growth forecast of 1.4 percent is too optimistic.
“Our forecasts say that growth will be at a paltry 1.2 percent at the end of the year,” he said.
Consumers cautious
Frederik Pedersen, the chief analyst at labour group Arbejderbevægelsens Erhvervsråd, said consumers and businesses are still being cautious.
“There is not a lack of money, but consumers and businesses are not using it,” Pedersen told Jyllands-Posten. “The international economy is creating uncertainty.”
A delicate balance
Peter Jakobsen, a macro economist at Sydbank, said the Danish economy is balanced on a very fine line.
“Exports are pulling things down, while private consumption and government spending are lifting growth,” he said.
"Today’s numbers suggest the economy is closer to stagnation than recovery."
However, Jakobsen is still optimistic the economy will finish strongly at the end of the year.
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