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Denmark The 2015 budget stays within the limits in Denmark – Danske

FXStreet (Barcelona) - The Danske Research Team sees the budget to be very mildly contractionary and expect the government deficit to end up close below 3% of GDP.

Key Quotes

“Overall, the budget is very mildly contractionary. We expect the government deficit to end up close to, but below, 3% of GDP, supported by the advanced taxation of pensions as agreed at the beginning of October.”

“The government expects this to raise DKK15bn next year, which should be enough to ensure that the deficit stays within the 3% limit. This said, there are many uncertainties surrounding the forecast of the government deficit next year, e.g. the growth outlook, oil price developments in 2015, investment returns in the pensions sector and the number of refugees.”

“One thing to keep in mind is that the government has systematically overestimated the deficits: the average forecast error has been DKK37bn over the past 10 years, despite growth having disappointed repeatedly.”

“The agreement on the 2015 budget does not change our view that the Danish public finances are sound and will stay within the limits of the EU’s Growth and Stability Pact.”

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