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The success of Novo Nordisk<\/a> A\/S\u2019s weight-loss and diabetes drugs is poised to spur an acceleration of Denmark\u2019s growth after the pharmaceutical industry helped it avoid an economic contraction in 2023, according to analysts at the country\u2019s largest bank.\u00a0<\/p>\n Danske Bank A\/S now expects the Danish economy to expand 2.1% this year<\/a>, up from a previous estimate of 1%, and higher than all other forecasts compiled by Bloomberg. The Nordic country\u2019s 1.8% growth in 2023 would have been completely erased without the contribution from the pharmaceutical industry, as Novo Nordisk, which has grown to become Europe\u2019s most valuable company, is ramping up production to keep up with demand for its blockbuster Wegovy and Ozempic drugs.<\/p>\n \u201cIt does not look like Novo Nordisk is slowing down, and in the rest of the economy, we are also seeing some more growth,\u201d the bank said in its Nordic Outlook report published Tuesday. \u201cOther types of manufacturing are gaining, consumer spending should benefit from higher real incomes and improving sentiment, and construction from lower interest rates.\u201d<\/p>\n Danske Bank is also painting a brighter picture than most other forecasters on Sweden\u2019s economic prospects. The largest country in the region will see a manufacturing-cycle recovery pull the export-oriented economy out of its current slump, according to economists, who expect Swedish output to grow by 1.5% this year.\u00a0<\/p>\n Danske had previously expected a 1.3% expansion in 2024, and has become slightly more upbeat as it sees an improvement in the outlook for domestic consumption coinciding with an expansion that will be led by the country\u2019s manufacturing sector.\u00a0<\/p>\n \u201dGoods exports will be helped by a positive shift in inventory management, at the same time as a recovery in household consumption should offset continued weak domestic investments,\u201d chief economist Michael Grahn said. \u201cWe are heading toward brighter days.\u201d<\/p>\n The gap between companies\u2019 order intake and their stocks has decreased globally, and hence, even a moderate increase in demand should lead to replenishments, Grahn said in the report. \u201cThis development is even more forceful in Sweden, which is often leading the manufacturing cycle as a result of its export-intensive industry.\u201d<\/p>\n The Swedish economy could also be helped by lower borrowing costs as inflation decelerates. The Riksbank has said it could cut rates as early as in the first half of this year, and Danske Bank expects a first easing move in June, taking the benchmark rate to 3.75% from 4%.\u00a0<\/p>\n \u201cThe coming monetary policy easing will diverge from the typical pattern of rapid and forceful cuts as the economy is entering recession.\u201d Grahn and co-writer Gustav Sunden said. \u201cIn this situation, it is more about gradually adjusting the rate at a reasonable pace \u2014 25 basis points a quarter \u2014 to a reasonable level, about 2% at end-2025, as the economy will undergo a modest recovery.\u201d\u00a0<\/p>\n\nDanske Bank\u2019s Nordic GDP Forecasts:<\/h3>\n
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\n \u00a0<\/th>\n 2024<\/th>\n 2025<\/th>\n<\/tr>\n \n Denmark<\/td>\n 2.1% (1.0%)<\/td>\n 2.0% (1.6%)<\/td>\n<\/tr>\n \n Finland<\/td>\n -0.4% (0.3%)<\/td>\n 1.9% (1.9%)<\/td>\n<\/tr>\n \n Norway*\u00a0<\/td>\n 1.1% (1.1%)<\/td>\n 2.1% (2.1%)<\/td>\n<\/tr>\n \n Sweden<\/td>\n 1.5% (1.3%)<\/td>\n 2.0% (1.8%)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>
<\/figcaption><\/figure>\n<\/div>\nSubscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up<\/a> for free.<\/div>\n