The think tank of the Organisation for Economic Co-operation and Development published a country report on Denmark last week. The country report is issued every few years and contains an assessment of the Danish economy and a number of recommendations.
The OECD recognizes that Denmark has ambitious objectives for a green transition and for reducing greenhouse gases, but also advises that ‘further policy reforms are needed. The green tax reform must be completed to accelerate emission reductions,’ according to the significant advice of the OECD economists.
Introducing a tax on agricultural emissions, as currently discussed, could be helpful. Tax revenues could be used to help farmers transition to less emission-intensive activities. This OECD recommendation aligns with similar discussions in the European Union.
The report further states that Denmark has healthy public finances and that Denmark is a leading country on the green agenda. The most recent economic survey shows that GDP growth is expected to slow to 1.2% in 2024, before accelerating again to 1.5% in 2025.
Inflation has somewhat decreased, but remains high and there is a risk that a lack of labor could drive prices even higher, according to an assessment in the report. Denmark maintains a very cautious policy on admitting asylum seekers and foreign workers.
Reforms will be necessary to address the labor shortage and to adapt the national economy to increasing aging, the OECD warns.