Denmark - Economy

Economy

Denmark has a modern, prosperous and developed mixed market economy, ranking 16th in the world in terms of GDP (PPP) per capita and 5th in nominal GDP per capita. A liberalization of import tariffs in 1797 marked the end of mercantilism and further liberalization in the 19th and the beginning of the 20th century established the Danish liberal tradition in international trade that was only to be broken by the 1930s. Property rights have enjoyed strong protection. Denmark's economy stands out as one of the most free in the Index of Economic Freedom and the Economic Freedom of the World. The economy has high levels of international trade and Denmark is known as a free trade advocate in the European Union. Denmark is one of the most competitive economies in the world according to World Economic Forum 2008 report, IMD and The Economist.

As a result of its acclaimed "flexicurity" model, Denmark has the most free labour market in Europe, according to the World Bank. Employers can hire and fire whenever they want (flexibility), and between jobs, unemployment compensation is very high (security). The World Bank ranks Denmark as the easiest place in Europe to do business. Establishing a business can be done in a matter of hours and at very low costs. Denmark has a competitive company tax rate of 25% and a special time limited tax regime for expatriates. The Danish taxation system is broad based, with a 25% VAT, in addition to excise taxes, income taxes and other fees. The overall tax burden (sum of all taxes, as a percentage of GDP) is estimated to be 46% in 2011.

Denmark has a labour force of about 2.9 million. Denmark has the fourth highest ratio of tertiary degree holders in the world. GDP per hour worked was the 13th highest in 2009. Denmark has the world's lowest level of income inequality, according to the World Bank Gini (%), and the world's highest minimum wage, according to the IMF. As of June 2010 the unemployment rate is at 7.4%, which is below the EU average of 9.6%.

Denmark's currency, the krone, is pegged at approximately 7.46 kroner per euro through the ERM. Although a September 2000 referendum rejected adopting the euro, the country in practice follows the policies set forth in the Economic and Monetary Union of the European Union and meets the economic convergence criteria needed to adopt the euro. The majority of the political parties in the parliament are for the euro, but as yet a new referendum has not been held, despite plans; skepticism of the EU among Danish voters has historically been strong. Denmark is known for the Danish cooperative movement within among others farming, the food industry (Danish Crown), dairy production (Arla Foods), retailing (Brugsen), wind turbine cooperatives and co-housing associations.

Support for free trade is high – in a 2007 poll 76% responded that globalisation is a good thing. 70% of trade flows are inside the European Union. Denmark has the 9th highest export per capita in the world. Denmark's main exports are: industrial production/manufactured goods 73.3% (of which machinery and instruments were 21.4%, and fuels, chemicals, etc. 26%); agricultural products and others for consumption 18.7% (in 2009 meat and meat products were 5.5% of total export; fish and fish products 2.9%). Denmark is a net exporter of food and energy and has for a number of years had a balance of payments surplus while battling an equivalent of approximately 39% of GNP foreign debt or more than 300 billion DKK.

StatBank is the name of a large statistical database maintained by the central authority of statistics in Denmark. Online distribution of statistics has been a part of the dissemination strategy in Denmark since 1985. By this service, Denmark is a leading country in the world regarding electronic dissemination of statistics. There are about 2 million hits every year.