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UPDATE 1-Denmark's central bank lifts growth forecast on rapid post-pandemic recovery

·1-min read

(Adds detail)

COPENHAGEN, Sept 22 (Reuters) - Denmark's central bank on Wednesday raised its economic growth forecast for this year, repeating its projection that the Nordic nation is will see a strong post-pandemic recovery next year.

The bank expects GDP to increase by 3.8% this year compared with a June forecast of 3.3%.

"If the Danish economy continues into the boom in a balanced way in the coming years, there is no need for a greater tightening of fiscal policy than that proposed by the Government," bank governor Lars Rohde said.

He warned however, that the very strong demand might develop into an overheating economy and that the government should be ready to tighten its fiscal policy "to ease capacity pressure in the economy, so that we avoid an abrupt turn of the economic cycle".

Next year, economic growth is seen at 3.1%, rather than the 3.7% expected in June, it said.

While Denmark has seen a rapid recovery buoyed by strong private demand and high savings the further course out of the pandemic could be more uncertain due to lack of labour and disruptions in the global supply chain, it said.

(Reporting by Jacob Gronholt-Pedersen and Stine Jacobsen; Editing by Kevin Liffey and Louise Heavens)

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