Denmark Economic Analysis-government spending, trade, imports, and exports
Government spending accounts for over half of GDP. Since the economy is open to global trade and investment, Denmark benefits from high degrees of business freedom, investment freedom, and financial freedom. The overall regulatory environment encourages entrepreneurial activity. The banking sector has been under stress but remains guided by sensible regulations. Monetary stability is well maintained, and inflationary pressures are under control.
As of January 2012, inflation was at 2.3%. Denmark’s strong economy depends heavily on foreign trade, and the private sector is characterized by many small and medium-size companies.Flexible and modern employment regulations sustain the labor market. Denmark’s trade regime is fairly competitive and promotes the dynamic growth of trade. The country continues to be one of the world’s most open economies with respect to foreign investment, and the investment code is clear and efficiently administered. The modern and diverse financial sector has been undergoing a period of instability, with a number of banks performing poorly, but those in the business are hopeful that it will pick back up in the near future.
Denmark’s principal exports are machinery, instruments, and food products. The United States is Denmark’s largest non-European trading partner, accounting for 5.0% of total Danish goods trade in 2010. Aircraft, computers, machinery, and instruments account for the majority of Denmark’s imports.