Denmark's economy may decline 3%-6% in 2020, Finance Ministry estimates

Denmark's economy could shrink by between 3% and 6% this year as businesses struggle with the effects of lockdown to limit the spread of the new coronavirus, Finance Minister Nicolai Wammen said on Thursday. "We are facing a hard hit to the Danish economy," Wammen told a press briefing. "The second quarter of this year is likely to be one of the darkest chapters in Denmark's economic history."

The Danish central bank last week forecast a contraction of between 3% and 10% this year, depending on the depth and length of the crisis, with its main scenario being a 5% contraction. Wammen also said the government had proposed offering loans worth up to 35 billion Danish crowns ($5.1 billion) to small- and medium-sized businesses.

The loans would come on top of already announced economic support measures to businesses worth 287 billion crowns, including direct aid packages that will cost the state more than 60 billion crowns. Denmark, which was one of the first European countries to announce a lockdown, has reported 218 coronavirus-related deaths but has seen the number of hospitalizations of corona patients fall over the past week.

On Monday, Prime Minister Mette Frederiksen said daycare centers and schools will begin reopening next week as the first step in a gradual relaxation of the lockdown. ($1 = 6.8685 Danish crowns)