The Danish economy fell by a historic amount in the second quarter of 2020, losing 7.4 percent according to Statistics Denmark.
This accounts for the largest fall in GDP since the early 1990s, when the national stats agency began to measure economic growth on a quarterly basis. The figure also means that Denmark has technically entered a recession for the first time since the 2009 financial crisis. To qualify for a technical recession a country has to record two consecutive quarters with negative changes in GDP.
"There is no doubt that today's GDP figures for the second quarter will go down in the economic history books", Tore Stramer, senior economist with the Danish Chamber of Commerce, told the newspaper Finans.
He stressed that a GDP fall of 7.4 percent over a single quarter is incredibly dramatic and has never been seen in peacetime.
"We have to go all the way back to the beginning of World War II in 1940 to see a similar fall in economic activity over such a short time", he added.
COVID-19 rammer dansk økonomi bredt: historisk fald i BNP i 2. kvt. https://t.co/YDQDPX1d1k #dkøko #covid2019dk #dkfinans #dkbiz pic.twitter.com/IasUqOze4c
— Danmarks Statistik (@DSTdk) August 14, 2020
The swift downturn was primarily caused by measures introduced to counter the spread of the coronavirus pandemic and included a national lockdown, when all people working in non-essential functions in the public sector were ordered to stay home for two weeks.
Despite the huge plunge, Stramer sees reasons for optimism, such as signs of a turnaround that include increases in employment and consumer spending amid the process of gradual reopening. This opinion is shared by fellow economists.
"Following the reopening, several key measures are fortunately beginning to correct themselves", Allan Sørensen, senior economist at the Confederation of Danish Industry, mused. "We've seen Danes returning to businesses".
However, some areas such as export and corporate investment, will take a longer time to recover.
Denmark's economic dip is below the EU average of 11.9 percent and two times less than that of Portugal (14.1 percent) and Spain (18.5).
So far, Denmark has seen 15,617 COVID-19 cases and 621 fatalities.
