Denmark on Friday slashed its annual growth forecast to 1.4% from 3%, in large part due to weaker expectations for pharmaceutical giant Novo Nordisk.
Denmark has recorded strong annual growth in recent years, with its economy expanding 3.7% last year after getting a major boost from pharmaceutical exports.
Danish pharma giant Novo Nordisk makes blockbuster weight management drugs Ozempic and Wegovy.
The economy ministry noted that Denmark’s U.S. exports fell significantly in early 2025 after a huge spike in late 2024, due to both inventory build-up and increased competition in the weight loss drug market, which has seen Novo lose market share. Generic medicines are also squeezing its sales opportunities in the U.S., the ministry said.
Pharmaceuticals are now expected to contribute just 1.3 percentage points to Denmark’s goods exports growth this year, down from 8.1 percentage points in 2024. Total goods export growth is projected to fall to 2.7% in 2025 from 10.5% the previous year.
Europe’s pharmaceutical sector has been rocked this year by the threat of sky-high U.S. tariffs, though some certainty has now been provided by the EU-U.S. trade deal.
The Danish economy ministry said U.S. tariffs had weighed on its growth forecast, while a statistical revision showed that real GDP expanded less in 2021-2024 than previously calculated.
“Growth in the first quarter of 2025 has also been weaker than previously expected. Together with the American tariff increases and downwardly adjusted expectations for the pharmaceutical industry, this has given rise to a significant downward adjustment of the estimate for GDP growth in 2025,” it said in a statement, according to Google Translate.
It added that despite the Brussels-Washington trade deal, there remained a “significant degree of unpredictability linked to the U.S. administration’s policy,” which was adding to uncertainty around conditions for Danish exporters, potentially weighing on business investments and activity. Households, meanwhile, remain concerned about global events and high food prices, it said.
The ministry stressed, however, that despite the lower 2025 growth forecast, its economy remains strong overall, with high employment and inflation expected to be below 2% on an annual basis.
It revised its growth forecast for 2026 higher, to 2.1% from 1.4%, on expectations for higher private and public consumption.
Novo woes
Two years ago, a boom in weight loss drugs led Novo Nordisk to overtake luxury giant LVMH as Europe’s most valuable company.
It has since slipped down that table following share price falls of over 10% in 2024 and more than 40% in the year to date. Investors remain concerned about competition from the likes of U.S. rival Eli Lily, slower overall market growth, and questions have been raised over its next-generation treatments.
The company’s earnings nonetheless remain robust, with the drugmaker reporting 67% year-on-year sales growth at constant exchange rates of 19.53 billion Danish kroner ($3.03 billion) in quarterly results published earlier this month.
It said in the accompanying release that it would double down on direct-to-consumer sales in its battle with copycat compounders and U.S. President Donald Trump’s demands for lower domestic drug prices.