31 July 2012
The three leading credit rating agencies, Standard & Poor’s, Moody’s Investor Service and Fitch Ratings, have all awarded the top AAA grade to the Danish economy along with the other Scandinavian countries. The ability to prepare the economy for financial fluctuations as a result of the experience of previous recessions is said to be a key reason behind Denmark’s favourable position, writes the Berlingske Tidende daily newspaper.
Denmark and the other Scandinavian countries have all managed the current financial instability in Europe considerably better than the remaining European nations. Countries such as Germany, the Netherlands and Luxembourg, who are known for their stable economic structures, have all received warnings that their credit ratings will probably soon go down.
The fact that Denmark and all the Nordic countries can boast economies which are amongst the absolute global elite is the result of several factors, argues Chief Economist at Danske Bank, Steen Bocian.
- All the Nordic nations were in a uniquely strong position when the crisis erupted. They had public finances under control and a large capacity for financial resistance in other areas as well. Because of this they have been able to cope with the adversity, says Steen Bocian.
Public debt in the Scandinavian countries is still below 40 percent of GDP, whereas the European average stands at 80 percent.
- Meanwhile, unemployment has increased considerably less in Nordic countries compared to the rest of Europe, partly because interest rates have been so low, elaborates Niels Rønholt, Senior Economist at Jyske Bank.