Characteristics of Denmark's Economy - Research Paper Example

Denmark is a European Union (EU) member meaning that most of its regulations and legislation match the standards of the European Union.

            The country exists along the strongest supporters of trade liberalization within the European Union. After an extended upswing driven by consumption, its economy started dawdling in the year 2007 accompanied by the ending of the housing boom. In the years 2008 and 2009, the prices of houses significantly dropped, and have continued dilapidating. This decline has been worsened by the global financial crisis. The decline also increased the costs incurred in borrowing leading to decreased consumer confidence, reduced export demand, and lesser investments (Country Economic Forecast, 2012).

            Seventy-five percent of the country’s Gross Domestic Product (GDP) is accounted for by the service industries. On the other hand, the agricultural sector recorded reduced results since the finish of World War II. These proportions of the sectors’ contribution are also portrayed in employment; the agricultural sector accounts for 1.6%, the services sector 73%, and the industrial sector 25%. The country’s labor force is extensively unionized where 70-75% of total workers associate with the Confederation of trade unions (COTU); the unions exhibit cooperative relationships with the economy’s employers. Similar to other Nordic nations, women’s employment and participation rates are high (Country Economic Forecast, 2012).

            The country has a monarchy style of leadership; with Queen Margrethe II being the state’s head. The country has a high degree of accountability and transparency evidenced by the political institutions’ affairs satisfaction. It is considered to be among the least corrupt countries. It's corporate tax and VAT rates stand at 25%. The objective of the country’s central bank is inflation stabilization (Country Economic Forecast, 2012).

            The estimated country’s Gross Domestic Product for the year 2012 was $ 208.5 billion, the GDP per capita estimate for the year 2012 was $ 37,700, and the GDP real growth estimate for the year 2012 was -0.4%. Unemployment rate estimate and inflation6.4% and consumer price inflation 2.4% (Central Intelligence Agency, 2013; Country Economic Forecast, 2012). The country's ethnic groups comprise Faroese, Somali, Turkish, Scandinavian, Iranian, German, and Inuit. The life expectancy, migration, and education literacy measures are 79 years, 2.36 migrants/per 1,000 population, and 99% respectively (central intelligence agency, 2013; United Nations Development Program, 2013). The literacy level estimate is for the year 2003.

            The country’s ranking comparisons to the other global countries are as follows; net migration rate 33rd, life expectancy 48th, unemployment 67th, GDP 54th, GDP real growth 192nd, GDP per capita 32nd, and inflation 61st (Central Intelligence Agency, 2013). The forecasted trend in the indicators from the year 2012 to the year 2017 follows real GDP growth -0.4%, 0.8%, 1.4%, 1.7%, 1.9%, and 1.8% consecutively while inflation is 2.4%, 2.1%, 2.3%, 2.2%, 2.1% and 2.1% consecutively (Country Economic Forecast, 2012). The GDP real forecast growth trend shows improvements, a condition depicting economic growth. On the other hand, the forecast trend of the inflation records declines, also a symbol of a growing economy. Therefore the county, in comparison to other global countries and under the changing economic conditions is in a better position to grow or expand further.