Denmark's national debt is on a diet: 'Absolutely impressive'

Disappointing Debt Level

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However, when political sides have spent billions on defense, sent money to Ukraine, and spent money on public welfare, one might wonder how the national debt is still soaring *.*

- We have had surprisingly high tax revenues from personal income due to the record high employment. In addition, Danish companies have done quite well in global competition, and this has meant that companies have paid a lot in corporate tax in recent years, says Kristian Skriver.

© Ritzau Scanpix

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What is national debt?

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It is the National Bank that manages the national debt in Denmark.

National debt is a state's accumulated debt to domestic and foreign creditors.

When a state incurs debt, it can be for reasons related to economic conditions, expenditures on investments, or financial assets.

Denmark's low debt level can lead to a good credit rating, which makes it cheaper for the state to borrow money, as creditors from home and abroad trust that the Danish state is good at paying back its debt.

Source: National Bank

Looking beyond the rest of Europe and the world in general, Denmark's low debt is not something to boast about.

- There must generally be many Western countries that look enviously at Denmark, because many other Western countries are currently struggling with a large and growing public debt. And at the same time, several countries are facing a number of bills, such as defense, says he.

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Who can take the credit?

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When things go well in one's own economy, either by saving up for a vacation, paying off a mortgage, or spending less on fast food, one would like to find the reason why things are going in the right direction.

In the same way, there are several reasons why the Danish national debt has shrunk.

- A lot of foreign labor has come to Denmark. We have received many international colleagues around us, and that is something that boosts the economy, says Kristian Skriver.

In an article in Berlingske ( https://www.berlingske.dk/oekonomi/vores-faelles-gaeld-banker-ned-til-det-laveste-i-50-aar-haarde-reformer?gaa_at=eafs&gaa_n=AerBZYNzLcQGguGSL8Dv0DrXU7JuDi4ZgdWC3QMm12jn6caIkCSm5c7EpzazaDsocJw%3D&gaa_ts=681df906&gaa_sig=og4VZe99ebkCj9dQijoIAXjXc4Hk6Yz47J7RV_4zbqxy0SRB89OKBiRYWdfcnM88YUu6oDHyfnGr_o2v9CAWXQ%3D%3D ), Chief Economist Helge J. Pedersen highlights that the reforms with the rising pension age have also had an impact on the reduced national debt.

And it is senior economist Kristian Skriver who agrees.

- The reforms have postponed the pension age and the retirement age. And that is something that has ensured that we have been able to maintain the employment boom for a longer period and thus have had very high revenues in recent years, he says.

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