Damning report points to more unemployment, less growth

The so-called ‘wise men’ of the Economic Council believe the current period of economic stagnation could continue until 2014, contradicting the government which has predicted moderate growth and a fall in unemployment next year, reports Seven59.dk and ekstrabladet.dk.

In its Autumn report, published Thursday, the Council states that although the sluggish economy would benefit from fiscal stimulation it would be at odds with EU recommendations.

»We advise against it«, said head of the Council, Prof Hans Jørgen Whitta Jacobsen.

An English summary of the report can be found here.

Goes against government optimism

»Denmark has already reached the limit of what can be done to stimulate the economy and the best thing now is to hold back until 2014 when the need could be greater«.

The new report forecasts no more than 0.2 pct. growth this year, a full percentage point less than the wise men’s pre-summer prediction, and 1.6 pct. in 2013.

Unemployment is expected to be around 165,000 at the end of the year, rising to 174,000 in 2013, even though the government has claimed its kick-start policy will create 20,000 jobs.

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