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Danish Central Bank Flags Risks as Government Talks Get Underway

Sanne Wass
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Denmark’s central bank slashed its 2026 GDP growth forecast to 1.8%, down from September’s 2% projection, citing prolonged Middle East conflict as a major economic threat. A worst-case scenario—Persian Gulf oil and gas supply disruptions—could shrink growth by 0.7 percentage points this year, deepening domestic economic strain. The warning comes as government spending talks begin, with the bank urging fiscal restraint to mitigate external shocks and prevent further economic instability. Nationalbanken’s revised outlook underscores Denmark’s vulnerability to global energy market volatility, particularly amid geopolitical tensions in key supply regions. The alert signals broader European exposure to Middle East conflicts, pressing policymakers to balance stimulus needs with long-term resilience against energy-driven downturns.
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Denmark’s central bank warned the domestic economy could take a significant hit if the conflict in the Middle East drags on, urging caution on public spending as government negotiations get underway.Nationalbanken cut its 2026 growth outlook to 1.8%, down from 2% forecast in September. It also flagged “significant risks” to the outlook, warning that growth could take a 0.7 percentage point hit this year in a scenario where oil and gas supplies from the Persian Gulf remain restricted.

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