It is interesting that economies in the world that are abundantly rich in natural resources (oil, minerals…) have relatively low levels of development, while others with less natural resources are developing more. This last case is Denmark. An economy with a hostile climate and few natural resources needs to thrive based on smart, solid and reliable institutions, a high-quality higher education system, facilities for creating businesses, attracting capital and building adequate infrastructure. Among the most admired labor markets in the world (flexibility). All of this made excellent breeding grounds for some of the most sophisticated medicines produced in Denmark and serve to boost the economy today, much like an oil discovery.
Forecasts for the Danish economy are promising thanks to a company dedicated to maritime transport and two drugs that are highly effective in the fight against obesity: Ozembic and Vecovi. Danish company Novo Nordisk. Both drugs are similar. As for Ozempic, the drug, developed to fight diabetes, slows down the rate at which food leaves the stomach, helps reduce the amount of sugar released by the liver and, when blood sugar is high, increases insulin levels. Pancreas. At the same time, Ozempic creates a feeling of satiety, which, in principle, reduces food consumption with consequent weight loss.
As well as helping people with diabetes and obesity, these drugs have at least temporarily 'cured' Denmark's economy. Facing a possible recession in 2023 A bleak situation already in 2024. Denmark is a very open economy that is heavily dependent on the Eurozone, its main trading partner, so a downturn in the Danish economy seemed inevitable due to the weakness shown by the Eurozone. However, the pharmaceutical industry is allowing Denmark to weather the storm. The Nordic country is facing more difficult times than usual due to the recent rise in income inequality, leading the government to take controversial measures.
As can be seen in the map based on market consensus carried out by Bloomberg, the Danish economy has gone from 'recession' to growth of more than 1% in 2023. Also, experts believe that GDP will advance closer to 2% annually by 2024, a 180-degree turn largely due to a drug that also reverses the Bank of Denmark's map.
This winter, economic growth is supported by, among other things, a strong pharmaceutical sector. Headwinds from high inflation and rising interest rates remain, but confidence levels in the economy have increased slightly. Although the impact of these drugs may seem more 'tolerable' than real, the truth is that real indicators in the Danish economy are looking good. unemployment rateAlthough it has risen slightly in recent months, it is still less than 3%.
Brussels revises its forecasts for Denmark
from As highlighted by the European Commission in their latest report Predictions that the Danish economy will grow more than expected due to pharmaceutical exports: “Net exports will be the driving force of growth in 2023. Exports are expected to grow significantly, driven by exceptional pharmaceutical products manufactured in Denmark and Denmark. Outside the country, in the latter case, marketing and processing in Danish exports.” are only taken into account, and the impact on national production is minimal,” the report said.
On the other hand, the impact of the report is also highlighted Maersk Shipping Company On the economy: “Services exports are expected to experience strong growth in 2023, partly linked to transportation, Especially sea transportHowever, the contribution to growth of exports is expected to be 2.7 points for 2023, while it will be 0.1 points in 2024 and 2025.” Novo Nordisk becomes Maersk They will continue to add to GDP in the coming years. “Denmark is expected to record substantial current account surpluses throughout our forecast horizon,” European Commission economists say.
Also adds gas and sea (Maersk).
While the organization of the news seeks metaphors with oil, the reality is that Denmark's GDP is going to gain as well. That's some boost to the extraction of hydrocarbons from the North Sea. “We estimate that GDP will grow by 1.9% in 2024. Part of the growth in 2024 Reopening of Tiara oil and gas field (This will contribute 0.5 percentage points to GDP in 2024). Industry growth will be 1.2% in 2024,” they say in a report on economic forecasts from the Danish Confederation of Industry.
Denmark is a 'relatively small' economy compared to its companies, particularly pharmaceutical company Novo Nordisk and shipping company Maersk. Novo Nordisk, for its part, has a market capitalization that sometimes exceeds Denmark's total gross domestic product (about $400 billion), so its company's activity can have a significant impact on the economy. A country condemned to recession.
They point out that from the Confederation of Danish Industry Novo Nordisk Y Maersk, by Danish standards, are incredibly large companies. The development of these two institutions is most clearly reflected in the Danish national accounts. This also applies to the extraction of oil and gas from the North Sea. By 2023, pharmaceutical industry production has grown by just 15%. This corresponds to an annual effect on GDP of billions of Danish kroner, the association assures.
On the other hand, the shipping sector made a significant contribution to the Danish economy in 2022. That year, export earnings from sea transport were 531 billion Danish kroner, almost 200 billion Danish kroner more than in 2021. Very important for balance of payments. Now, with the recent cargo boom due to the Red Sea crisis, Maersk can once again make a positive contribution to Denmark's GDP.
Ozembic y Vekovi
In the past two years, no new drug has had as wide an impact as diabetes drug Ozempic and weight-loss drug Wegovy, made by Danish company Novo Nordisk. These drugs have changed the lives of millions of people who now rely on them to control hunger. These two products have made Novo Nordisk one of the most valuable companies in Europe.
Anti-obesity drugs will be everywhere in the next 50 years, an industry executive revealed in reports to Bloomberg. Adam Steinsberg says that “a large portion of the population” will accept the drug. Zeeland PharmaAccording to Bloomberg Agency, the Danish biotechnology company is developing new treatments for weight loss.
Led by Novo Nordisk's Wegovy and Eli Lilly's Zepbound, the latest generation of obesity treatments are on track to generate $80 billion in global sales by 2030. Retailers to insurers.
A few kilometers from Novo on the outskirts of Copenhagen, Zeland is among the drugmakers challenging industry leaders. Steinsberg says the new drugs will eventually outperform Wegovy and Zepbound in terms of safety (which helps people stay on treatment longer) and preservation of the patient's muscle mass. “We haven't seen the winning molecule yet,” he said in an interview before the start of the JP Morgan Healthcare conference in San Francisco last Sunday.
This pharmaceutical competition in Denmark promises to boost the economy for years to come. This industry generates huge profits that affect the Danish economy in different ways. On the one hand, among the various taxes, the corporate tax stands out (it taxes the profits of these giants). On the other hand, through employment, Because these pharmaceutical companies create high-quality employment (researchers, administrators, logistics…) directly and other types of employment indirectly. Despite everything, Denmark will have to face the headwinds facing Europe.
Despite this success, Danske Bank believes that the Danish economy faces significant challenges. Just as countries depend only on oil, relying solely on the pharmaceutical sector is neither favorable nor sufficient to always 'pull' GDP: “We see a more or less stagnant economy outside the pharmaceutical sector. Bankruptcy figures reach their highest level in 2023. Since 2010, the delayed effect of pandemic closures , but also a reflection of higher financing costs and weaker demand in some sectors such as housing,” these experts point out.
