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Nordic Outlook: Coming in for a soft landing

It looks like a soft landing, with lower-than-normal growth in Europe, moderately rising unemployment and inflation stabilising in the coming year. This is one of the conclusions in the new Nordic Outlook.

The year is coming to an end, and after a year with high inflation and high interest rates, one of the key questions is how the economy will develop over the next year. 
In a brand-new Nordic Outlook, Danske Bank’s macroeconomists give their take on the outlooks for the global as well as Nordic economies. 

If we start with the global perspective, it looks increasingly like a soft landing for the major economies, where inflation is declining faster than expected and the
economies are more stagnating than declining. However, it is far from a done deal. 

“The global economy seems more and more set on a soft landing, but we see quite large differences between different regions in the world. We think the US will be able to escape recession while it looks much bleaker in the euro area. At the same time, the risk picture continues to be complicated and there is quite large risk of the economy seeing a harder and more harsh landing than our baseline forecast,” says Heidi Schauman, Global Head of Research at Danske Bank.

In the video here, you can see, Heidi Schauman explain more about the elevated risk levels and when she expects the central banks to make rate cuts.


Like other European countries, Denmark’s economy is essentially stagnant, with the caveat that pharma giant Novo Nordisk is keeping overall activity growth above water.

​​Reality for the broader corporate sector is much more mixed, with growth in some areas, such as the travel and restaurant industries, and contraction in others, such as housing construction and much of the manufacturing sector. 

Despite the stagnation, employment continues to rise, increasing overall household income and providing scope for greater private consumption as real wages are also recovering. However, employment is expected to turn soon and moderately rising unemployment is expected in the course of 2024 and 2025.

​Inflation has tumbled in Denmark, mostly due to temporary effects, and therefore inflation is expected to rise again.

Sweden leaning against the wind
Turning to Sweden, the GDP in the third quarter of 2023 decreased for the second quarter in a row, so Sweden is now in a technical recession. However, it is not as severe as many had predicted. 

For example, the Swedish labour market has proven to be more resilient than expected. Unemployment has increased slightly, but it is still at a low level.
Manufacturing is growing while consumption remains stable. Housing construction has collapsed since the policy rate started being raised. However, the housing market may turn as there are indications that housing starts may pick up in the spring.

The Riksbank has temporarily paused interest rate hikes to observe the impact of previous hikes while maintaining the option to raise rates if needed.

Our chief economists share their view on the Nordic economies













Norway: Growth and inflation are slowing
Looking at Norway, there are now clear signs that both growth and inflation are slowing. Negative real wage growth and ever higher mortgage rates are strong headwinds for households, impacting particularly on private consumption and housing investment. Unemployment is continuing to rise moderately, although it is still at low levels.

Norges Bank’s rate decision in December is very uncertain and could go either way, but there is a good case that they will keep rates on hold in December. Looking towards next year, it is expected that Norges Bank, in line with other central banks, will cut rates considerably. 

Finland: Consumer revives after a cold economic winter
Finland’s economy is in recession, but it is expected to pick up during 2024 as a result of private consumption supported by falling inflation and the gradual reinvigoration of export demand.

Labour markets will remain fairly steady even though some sectors will reduce workforce. Many companies are still struggling with labour shortages and wages are rising faster than in recent years.

Falling inflation and interest rates is expected to increase purchasing power of consumers next year which will increase demand in both consumer durables and the housing markets in 2024.

Nordic GDP forecasts





2.7%1.1% (1.7%)1.0% (1.2%) 1.6%
2.9%-0.2% (0.0%)1.3% (1.7%) 1.8%
3.8%1.1% (1.2%)1.1% (1.4%) 2.1%
1.6%-0.5% (-0.2%)0.3% (0.8%) 1.9%


Paranthesis are projections from September 2023