2023-08-31 17:43:36
The rise in the consumption of antidiabetics in the United States is rocking Danish monetary policy. This surprising “butterfly effect” macroeconomic version is the very concrete dilemma that the National Bank of Denmark (DNB) has been facing for several months. “The pharmaceutical industry, whose exports have doubled over the past ten years, has become one of the main engines of our economy, almost to a dizzying point”, comments Helge Pedersen, economist for the Nordea bank in Copenhagen. According to Capital Economics, the sector has contributed a third of growth since 2020.
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This is due in particular to the good results of the Danish laboratory Novo Nordisk. Sales of its anti-obesity treatment, Wegovy, launched in the United States two years ago, swelled by 344% in the first half, and those of its injectable antidiabetic Ozempic continue to prance. “We have more patients than ever”, boasts the CEO, Lars Fruergaard Jorgensen, in his quarterly report published in August. The group estimates that its turnover, of 176.95 billion Danish crowns (23.7 billion euros) in 2022, should increase by 30% in 2023. And its market capitalization, which exceeds 300 billion euros, is almost as high as the gross domestic product (GDP) of Denmark, namely 380 billion euros in 2022, according to Eurostat.
“These good results have boosted the current account surplus”, explains Andrew Kenningham, country specialist at Capital Economics. This balance, which measures the exchange of goods, services and income, recorded a surplus of 13% of GDP in 2022, against 8.8% in 2019. Even Germany has never done better. “Thanks to this, Danish growth has surpassed that of its European neighbors in recent months”, adds Helge Pedersen. It stood at 0.5% and 0.6% in the last quarter of 2022 and the first quarter of 2023, compared to -0.1% and 0.2% for the European Union (EU) average.
Discourage investments a little
Incidentally, the good health of the sector is boosting state revenues: in 2022, the kingdom of 5.9 million inhabitants posted a budget surplus of 3.3% of GDP, against a deficit of 3.4% in the EU. However, “the success of Novo Nordisk, and more broadly of the sector, translates into a colossal influx of foreign currency into the country, pushing the value of the Danish krone upwards”, points out Palle Sorensen, an economist at the Nykredit bank in Copenhagen. This complicates the task of the DNB, whose mission is to keep the Danish krone pegged to the euro.
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