Denmark's economic growth slows amid pharmaceutical export challenges

Denmark's economic growth has been primarily driven by a significant surge in pharmaceutical exports over the past year. According to a report from the International Monetary Fund released on May 14, 2025, the country's economy experienced a robust 3.7% growth in 2024, largely due to the performance of its pharmaceutical industry. However, the IMF has projected a slowdown in economic growth, anticipating a decline to 2.9% in 2025 and further to 1.8% by 2026. This moderation in growth is attributed to a weakness in export growth, including that of pharmaceutical goods. Despite the expected slowdown, the impending threat of U.S. tariffs on the pharmaceutical industry is not considered a major factor impacting Denmark's economy. The IMF clarified that most Danish drug products are not manufactured within the country nor do they typically pass through its borders. As a result, only about 3 percent of total exports are from Danish-produced goods, which limits the direct effect of potential U.S. tariffs. However, trade tensions and uncertainty in trade policy could pose risks to Denmark's economic outlook. Last year, the FDA allowed American compounding pharmacies to produce copycat versions of drugs, leading to a decline in the sales of key Danish pharmaceuticals, particularly affecting Novo Nordisk. The company’s CEO, Lars Fruergaard Jørgensen, is optimistic that sales will improve later this year as the FDA’s decision influences the market dynamics. This highlights the complexities of the global pharmaceutical landscape, particularly as the U.S. has become a key trading partner for Denmark. U.S. President Donald Trump’s administration continues to threaten tariffs on pharmaceutical imports, which initially exempted pharmaceuticals but signaled potential targets within the global industry. The European Federation of Pharmaceutical Industries and Associations (EFPIA) raised concerns that without rapid policy changes, pharmaceutical research, development, and manufacturing might shift toward the U.S. This situation underscores the competitive dynamics between Europe and the U.S., with Europe facing challenges in attracting and retaining investment within the pharmaceutical sector.