Denmark raises growth outlook despite Novo Nordisk woes

By Soren Jeppesen

COPENHAGEN, Dec 4 (Reuters) - Denmark on Thursday sharply raised its economic growth forecast for 2025, due in part to the pharmaceuticals industry, which is performing well, its economy minister said, despite recent layoffs at drug maker Novo Nordisk.

Danish GDP is now seen growing by 2.6% this year, up from a previous prediction in August of a 1.4% expansion, putting the country on track for one of the fastest growth rates in Europe and ahead of major economies like Germany, France and Italy.

The GDP forecast for 2026 was meanwhile increased to 2.2% from 2.1%, while the following year would see a slowdown to 1.6%, the government predicted.

"The upward adjustment of GDP growth is due to the pharmaceutical industry once again surprising positively for the Danish economy," Economy Minister Stephanie Lose told a press conference.

Denmark has benefited in recent years from Wegovy-maker Novo Nordisk's booming weight-loss business, and the country's growth in 2024 ranked among the highest in Europe, in part driven by the drugmaker.

NOVO NORDISK SLOWDOWN NOT A 'SYSTEMIC CONCERN'

Novo Nordisk, facing growing competition in the obesity drug market, has struggled with slowing sales growth and profit warnings this year, leading to layoffs of 9,000 employees, more than half of them in Denmark.

Lose said lower growth rates for Novo Nordisk were not a systemic concern for the Danish economy: "The pharmaceutical industry is not particularly branched out in the Danish economy, and a lot of what it contributes to growth comes from activities abroad, for example, when Novo Nordisk produces in the United States."

The outlook is also bolstered by a broader economic strength, beyond the pharmaceuticals industry, she said.

Denmark, also home to global companies like shipping group Maersk, brewer Carlsberg, toymaker Lego and wind turbine maker Vestas, had expressed concerns that trade wars and tariffs could dampen growth.

"The Danish economy has so far defied the headwinds and has proven to be extremely strong," Lose said, adding that GDP growth in the third quarter was the highest in four years.

"Employment continues to rise, inflation is low and stable, and the purchasing power of Danes is increasing," she added.

In September, Denmark's central bank cut its GDP forecasts for 2025-2027, citing a negative impact from U.S. trade tariffs and weaker growth in the pharmaceuticals industry.

(Reporting by Soren Jeppesen, additional reporting by Stine Jacobsen, editing by Terje Solsvik and Sharon Singleton)