Economic and financial trends - Danske...

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25 June 2015

Nordic OutlookEconomic and financial trends

� Denmark: Denmark’s recovery on a firm footing - We are at the start of a new upswing

� Sweden: An ambivalent and reactive Riksbank set to miss its target - We expect solid growth but Riksbank will be forced to act again

� Norway: The end is in sight - Oil investment now looks set to flatten out next year

� Finland: Signs of a slow recovery - New government struggles with both cyclical and structural problems

2 | 25 June 2015 www.danskeresearch.com

Nordic Outlook

Analysts

Editorial deadline 24 June 2015 Investment Research

Editor-in-Chief:

Steen Bocian

Chief Economist

+ 45 45 12 85 31

[email protected]

Macro economics:

Las Olsen Denmark +45 45 12 85 36 [email protected]

Mikael Olai Milhøj Denmark +45 45 12 76 07 [email protected]

Mark Thybo Naur Denmark +45 45 12 85 26 [email protected]

Roger Josefsson Sweden +46 (0)8-568 805 58 [email protected]

Frank Jullum Norway +47 85 40 65 40 [email protected]

Pasi Petteri Kuoppamäki Finland +358 (0)10 546 7715 [email protected]

Henna Mikkonen Finland +358 (0) 10 546 6619 [email protected]

This publication can be viewed at www.danskebank.com/danskeresearch

Statistical sources: Datastream, Macrobond Financial, OECD, IMF, National Institute of Social and Economic Research,

Statistics Denmark and other national statistical institutes as well as proprietary calculations.

Important disclosures and certifications are contained from page 38 of this report.


Nordic Outlook

Contents

Nordic Outlook At a glance 4

Denmark Denmark�s recovery on a firm footing 7

Forecast at a glance 13

Sweden An ambivalent and reactive Riksbank set to miss its target 14


Norway The end is in sight 20


Finland Signs of a slow recovery 27


Global overview Reflation theme building 34

Economic forecast 36

Financial forecast 37

The Nordic Outlook is a quarterly publication that presents Danske Bank�s view on the economic outlook for

the Nordic countries. The semi-annual publication The Big Picture sets out our global economic outlook.


Nordic Outlook

Nordic Outlook At a glance A strong region The Nordic region still looks to be one of the strongest and most stable economic regions globally when we look at the prospects for the forthcoming years. We expect GDP growth in Sweden, Norway and Denmark to be around the level of 1.5-2.0% in 2015 and even above 2% in 2016. Only Finland is still cyclically weak and even though growth looks set to pick up the economy still looks very fragile. Growth in the Nordic region is likely to come from an expected continued strengthening of the overall European economy, but domestic challenges also seem limited, leaving room for growth in domestic demand.

We have only made quite small revisions to our economic forecasts for the Nordic countries compared to our latest edition of Nordic Outlook from March. The most significant change is that GDP growth in Norway seems to be more negatively affected by the lower oil price than what we expected. We now forecast growth in Norway of 1.5% in 2015, but seen in the light of the very significant decline in oil prices the Norwegian economy still looks strong as it benefits from strong consumer spending and the weaker NOK.

Impact from a Grexit not devastating The economic and financial situation in Greece is attracting attention as the risk of Greece leaving the eurozone has increased in recent months. Our base case is that the politicians in Europe will in the end strike a deal ensuring that Greece stays in the eurozone, but as the game of chicken between Greece and the rest of Europe intensifies we cannot rule out the risk of something going wrong. The Nordic region will not be significantly affected by a Grexit if that were to happen, in our view. Its trade with Greece is limited and the financial exposure is close to zero. If Greece does leave the euro we would expect to see a strengthening of NOK and SEK but less than in 2011/2012. DKK is pegged to the euro, thus the appreciation pressure we saw in January and February this year will probably re-emerge, but the peg is indisputable and the central bank would likely react accordingly. We expect the first line of defence to be FX intervention and that interest rates would only be lowered in an extreme case, which we do not expect. We expect the financial and economic turmoil following a Grexit to be limited as we expect a strong political response and that the ECB would do whatever it takes to stabilise the markets through additional QE.

Even though we expect the financial and economic impact of a Grexit to be limited in the Nordic region, it is important to stress that there is not a lot of experience to draw upon when it comes to currency areas splitting up, thus there is a risk of a more substantial economic and financial effect in Europe than what we expect. If European growth is more significantly affected, then Denmark and Finland will be the most vulnerable as the two economies are in a more fragile economic situation than Sweden and Norway. Also Finland and Denmark’s business cycles are more in sync with the rest of Europe than Sweden and Norway. That being said, a more significant strengthening of SEK and NOK if the European crisis gets worse than expected could pose a significant macroeconomic challenge to the central banks in Norway and Sweden. The impact on inflation would argue for lower interest rates giving an increased risk of unbalanced growth led by overheating housing markets.

Nordic GDP growth still looking strong

Source: National statistics offices, Danske Bank Markets

Low inflation � except in Norway

Source: National statistics offices, Danske Bank Markets

Insignificant exports to Greece...

Source: National statistics offices

...as are imports



Nordic Outlook

Non-standard Swedish monetary policy increases the risk of bubbles

Monetary policy is extreme in all western countries. It is also extreme in the

Nordic region where central bank rates are negative in three out of four

countries. Only Norway has a positive interest rate, but it is as low as 1%

despite the fact that Norway is running very close to full capacity in the

economy.

We expect additional monetary easing in Sweden only. In Norway and

Finland we expect interest rates to be left unchanged, and we do not expect

additional QE in Europe or Sweden. In Denmark, monetary policy might be

tightened slightly as the appreciation pressure has fallen in recent months.

When the financial uncertainty linked to Greece levels off we expect the

Danish central bank to be able to start normalising Danish rates slowly by

increasing Danish CD rates by 25 bp before yearend, leaving the interest rate

at minus 0.5% instead of the current minus 0.75%.

We expect Sweden to ease monetary policy further by lowering the interest

rate an additional 10 bp to minus 0.35% by the end of the year. Our

expectation of a lower Swedish rate is a consequence of the low inflation, and

as we do not expect inflation to increase as quickly as the Riksbank foresees,

thus we expect the Riksbank to react to ensure that inflation expectations are

anchored.

The very low interest rates are leading to an increased risk of unbalanced

growth and bubbles building up. We have long been concerned about the

Swedish housing market, and the continued sharp price increases driven by

the low short-term interest rates is only adding to that concern. The

Norwegian market has also been increasing rapidly. The rapid price growth

has so far been justified by strong income growth, but as income growth is

decelerating due to the lower oil price, one has to be worried if the housing

market continues to rise – we see a clear risk of this given the historically low

interest rates.

Denmark has long struggled with a weak housing market although house and

apartment prices have actually been increasing in the larger cities since 2012.

Over the last year price increases of apartments in Copenhagen and Aarhus

have started to accelerate and if this continues there is a risk of regional

bubbles in our view. The acceleration in the price development in the

Copenhagen and Aarhus markets is closely linked to the historically low

Danish interest rates.

One way to address the risk of bubbles in the housing market is macro

prudential initiatives. But so far Sweden has not had success in implementing

tighter regulation to deal with the risks linked to the housing market and the

increasing household debt. Meanwhile Norway is yet to see the desired

results from the tightening measures that have been implemented. So far it

seems as though the effect on the household sector is quite limited. The

challenge to the authorities in Denmark is that the pressure is not nationwide

– there are no strong regional macro prudential tools.

Extremely low policy rates

Source: National central banks

Inflation expectations below target in Sweden

Source: Prospera

Houses prices to drop in Sweden


Hot housing markets in Sweden and Norway



Nordic Outlook

New governments in Finland and Denmark

There has been a change in government in both Finland and Denmark. The

new Finnish government probably has a more challenging task ahead of it

than the Danish as it is being forced to tighten budgets quite substantially and

reform the retirement system. The Finnish government also aims at achieving

a “social contract” with the labour market unions in which annual working

hours would be extended, locally negotiated wage agreements encouraged

and income tax cut. The aim is to improve competitiveness by what could be

called an internal devaluation. The negotiations take place during the

summer, and could cause turmoil in the Finnish economy if a deal is not

struck.

On 18 June Danes also voted for a change in government. Although the

parliamentary situation may be challenging for the new Danish government

led by the liberal party, there is no reason to expect a major change in

economic policy as a consequence of the change in government. Denmark

has to run tight budgets to avoid large public deficits and this challenge does

not depend on the colour of the government.

It is not only in Finland that labour market negotiations will attract attention

in the forthcoming quarters. The next round of centralised wage negotiations

in Sweden starts at the beginning of 2016. As inflation expectations are

extremely low at the moment, the Riksbank is being forced to act to ensure

that inflation expectations are not too low compared to the Riksbank target

for inflation. This is the main reason for our forecast of a lower Riksbank rate

by the end of this year.

Government debt to exceed 60% limit in Finland

Source: Statistics Finland, Danske Bank

Limited room for more expansive fiscal policy in

Denmark

Source: Convergence Programme 2015


Nordic Outlook

Denmark Denmark�s recovery on a firm footing The economic recovery in Denmark is on a firm footing and the

country is now at the start of a new upswing. We expect the Danish

economy to grow by 1.7% this year, rising to 2.1% next year.

However, doing better is not synonymous with doing well, and the

economy still faces some challenges.

We expect economic growth will lift employment further. As

unemployment is already low, the risk of bottlenecks in the labour

market is very real. Hence, political initiatives may be needed to

ensure that economic growth is not slowed by a lack of resources.

The labour market is not our only concern when it comes to pressure

problems. The accommodative financial climate presents a real risk

of bubbles forming in the Danish economy, and the owner-occupier

apartment market is already red hot, so measures may be needed

here to let some air out of the balloon before it grows too large.

Since our previous forecast in March, the Danish central bank has

intervened to the tune of DKK69bn to counter a rise in EUR/DKK.

However, given the strong currency inflow at the start of the year, we

expect Danmarks Nationalbank will aim to reduce its reserves

further before a rate hike might be on the cards. We expect to see

two unilateral rate hikes in H2 15, which will raise the certificates of

deposit rate to minus 0.50% by the end of the year.

Seven consecutive quarters of positive growth The Danish economy is on the right track: Growth has been positive for

seven quarters in a row – the first time since the start of the millennium –

employment is rising and the housing market is recovering. As Denmark is a

small, open economy, growth has largely come on the back of the pick-up in

the euro area.

The Danish economy has developed more or less in line with our previous

forecast from March, so we have no reason to make any significant changes.

We continue to expect the Danish economy to improve in the coming years,

supported by a weaker krone (DKK), low interest rates and cheap oil. We

still forecast growth of 1.7% this year, rising to 2.1% next year. Whether or

not we are proved correct will to a large extent depend on the robustness of

European growth. The nascent recovery is still at a fragile stage and could

again be derailed, just as in 2010-11, when the European debt crisis erupted.

One should remember, however, that while the economy is doing better, that

is not synonymous with doing well. GDP in real terms, employment and

house prices are all at lower levels than prior to the crisis. The main reason

for the lag in the Danish economy is households still having high levels of

debt, which were accumulated during the latest upswing in the mid-2000s.

Changes from previous forecast

Source: Statistics Denmark, Danske Bank

We are at the start of a new upswing


% y/y 2015 2016 2015 2016

GDP 1.7 2.1 1.7 2.1

Private consumption 1.9 1.9 1.6 2.0

Public consumption 1.0 0.3 0.7 0.2

Gross fixed investment 0.2 3.2 2.5 3.9

Exports 3.4 4.9 3.3 4.9

Imports 1.9 4.6 2.8 4.6

Gross unemployment (thousands) 125.1 116.8 128.1 122.4

Inflation 0.7 1.7 0.7 1.7

Government balance, % of GDP -1.0 -2.1 -2.4 -2.5

Current account, % of GDP 7.1 6.8 5.9 5.4

Current forecast Previous forecast


Nordic Outlook

Pressure on DKK eases further in recent months

Denmark and its EUR/DKK peg attracted an unaccustomed degree of

attention at the start of the year due to strong appreciation pressures on the

currency. The upward pressure prompted four rate cuts and intervention in

the FX market by Danmarks Nationalbank (DN), which lowered the

certificates of deposit rate to -0.75% and increased Denmark’s currency

reserves to almost 38% of GDP in February compared to 23.2% at the end of

2014. Pressure began to ease in late February, causing DN to increase the

central bank current account limits twice and to buy krone for DKK68.9bn in

all in April and May. Ordinarily, intervention to buy krone for DKK10-20bn

would result in a unilateral Danish rate hike, but the current situation is by no

means ordinary, and we expect that DN will prefer to reduce its currency

reserves further before a rate cut might be on the cards. The unresolved

situation with Greece is another reason for DN’s hesitancy at the moment.

We expect that Greece and its creditors will eventually reach an agreement,

which would mean an outflow of DKK. Given this, we estimate that DN will

hike rates twice by the end of the year, taking the certificates of deposit rate

up to -0.50%. Thus even if we are correct, policy rates will continue to be

extremely low and still a long way from the norm.

While slightly longer rates have corrected to some extent, in part due to better

economic key figures in Europe and rising inflation expectations, rates

generally remain low – and extremely low rates have consequences. First,

they put pressure on the bank system, as the banks have to place their money

with DN at a negative rate once they have used up their current account limit.

This means the banks have an incentive to ‘put their money to work’, which

can increase the probability of them taking on too much risk. Hence, credit

growth should come under increasing scrutiny in the coming years. Second,

very low interest rates increase the risk of asset bubbles in, for example, the

equity or housing markets – and indeed there has been an increasing focus on

the housing market of late. It is less than 10 years since the Danish economy

last experienced a housing market collapse and record-low interest rates have

stoked fears of a new bubble forming, especially in the Copenhagen

apartment market.

Housing market steams ahead in H1

While the Danish housing market has been undergoing a slow recovery over

the past few years, the pace of improvement has picked up in the first half of

this year. Figures from Statistics Denmark show that house and apartment

prices rose by 2.6% and 3.8%, respectively, between Q4 14 and Q1 15. We

have to go all the way back to 2006 to find similarly steep price increases

over a single quarter. Figures from property sales website Boligsiden and

estate agents home indicate that price growth has continued in Q2. The

pronounced increases in property prices are primarily due to extremely low

interest rates, which despite rising in recent weeks remain incredibly low

from a historical perspective. Low interest rates have made home financing

cheap, which has helped increase demand and therefore prices – as has labour

market growth. We expect house prices will continue to rise in the coming

years, though increases in interest rates will probably put a damper on the

most extreme examples. Nevertheless, we still expect to see solid price

appreciation of 7.1% this year and 5.8% next year. Hence the outlook is for

house prices to increase by more than nominal income growth would

indicate.

Extremely low policy rates in Denmark

Source: Danmarks Nationalbank, Danske Bank

FX reserves still very substantial

Source: Danmarks Nationalbank, Statistics Denmark

Mortgage rates still low in spite of correction

Note: Including trading margins; excluding administration fees

Source: Danske Bank Markets

House prices set to rise further



Nordic Outlook

We do not currently see any reason to fear a bubble in the housing market though, as prices remain moderate. This is also supported by the continued absence of growth in household borrowing despite low interest rates. Housing bubbles usually go hand-in-hand with high lending growth, as was the case in the mid-2000s. However, the current appreciation trend in the housing market is not being driven by growing indebtedness among households. One important proviso, however, is that lending figures only cover the country as a whole, and so say nothing about regional differences.

Another item of good news for the Danish economy is that the housing market pick-up is no longer solely concentrated in and around the major urban conurbations. According to Housing Market Statistics (Boligmarkedsstatistikken), house prices in all regions except Bornholm were higher in Q1 15 compared to Q1 14. We expect that the nationwide improvement will continue in the coming years, though still with the Greater Copenhagen area as the main driving force. However, while things are generally going better in many parts of the country, we would underline that some areas remain very fragile, with house prices here still substantially below pre-crisis levels.

Furthermore, while price appreciation has spread, prices are clearly still rising fastest in Copenhagen and Aarhus. Given that apartment prices have now reached pre-crisis levels in these areas, it is worth considering the risk of localised bubbles. Prices beating their previous record do not define a bubble. Demand for housing in Copenhagen and Aarhus may also be driven by more fundamental factors – such as relocation and strong income growth. One way of putting apartment price growth into an economic perspective to assess the risk of bubble formation is to consider prices in terms of regional GDP growth. When doing this for Copenhagen, developments in H1 do give some grounds for concern – for while prices are still 14.5% from their peak in these terms, the gap has narrowed by around 10 percentage points since Q4 14. Hence the apartment market is running at full steam at the moment.

Moreover, whether or not a bubble exists in the economic sense can quickly become a theoretical discussion – what is important for an ordinary homebuyer is not to take on too much debt, believe in eternally rising prices or be blinded by incredibly low interest rates. We can certainly not rule out property prices starting to fall – especially in the major towns and cities – in a few years’ time when interest rates begin to normalise. If so, price falls could hit hard, regardless of whether or not there has been an actual bubble or not.

Weaker DKK a boon to Danish economy

Both the EUR and hence the DKK – due to the EUR/DKK peg – have

weakened very substantially since December 2014 and the effective DKK

exchange rate is now 3.6% below its level of last December. The pronounced

fall in the effective exchange rate has given Danish exporters a competitive

boost, as Danish goods have become relatively cheaper abroad. This has

already had a major impact, with Danish goods exports rising by 4.4% in the

course of Q1. Quarterly growth in goods exports has only exceeded this level

five times since the start of the 1990s. Service exports in constant prices fell

in Q1, though this was largely due to technicalities connected with a highly

fluctuating deflator. In current prices, service exports rose by 2.3% over the

quarter. Hence, exports have generally got off to a good start in 2015.

While the DKK has strengthened a little in May and June, we would have to

go back to the end of 2002 – apart from a brief period in 2012 – to find a

weaker krone. As we expect the DKK to remain weak for the immediate

Housing market pick-up spreading to more areas of

the country

Note: Bornholm not included in graph.

Source: DK Mortgage Banks� Fed., Danske Bank

Rising house prices not due to increased net

borrowing

Note: Data break September 2013

Source: Danmarks Nationalbank, Danske Bank

Apartment prices corrected for wages, inflation

and relocation approach peak

Note: Regional GDP figures for 14/15 extrapolated by correcting

nom. GDP growth nationwide with an excess growth of 0.8

percentage points. H1 apartment prices extrapolated using figures

from �Boligsiden�.

Source: Statistics Denmark, �Boligsiden�, Danske Bank

Marked weakening of effective DKK exchange rate

Source: Danmarks Nationalbank


Nordic Outlook

future and we forecast faster growth in our export markets, the outlook for

Danish exports is bright. We expect exports to grow 3.4% overall this year,

rising to 4.9% next year.

Consumption rising

Private consumption growth hit a six-year high in the six months around the

turn of the year. A sharp rise in heating consumption caused overall

consumption to increase by 1.2% in the final quarter of 2014, while a more

broadly based increase pushed consumption up a further 0.7% in Q1 this

year. Consumption is now 2.4% up on last year. Hence, a consumption

recovery is clearly under way, supported by rising real income, more people

in work, low interest rates and extremely high consumer confidence.

However, the recovery still does not resemble the strong, loan-financed

consumption upswing that has previously got the Danish economy going

after a crisis. In fact, the first two months of Q2 have seen a rather sharp fall

in Dankort (Danish debit card) transactions. Moreover, the increase in

heating consumption in Statistics Denmark’s figures has been from an

extremely low level in the early part of 2014 and is unlikely to recur. That is

why we have not really changed our forecast for private consumption, though

developments so far mean that some growth has been shifted from 2016 to

2015 when calculating the figures for the year as a whole.

Essentially, our position remains that consumption is being stymied by the

unusually large amount of debt owed by households. For households overall,

debt currently amounts to roughly three years’ income, which is the same as

in 2007. However, the value of owner-occupier dwellings has fallen from 4.2

to 3 years’ income, in other words, basically the same as the debt. Hence,

households still need to adjust their debt levels to the new house prices. We

have estimated that private consumption will more or less follow income

growth in the coming years, which means debt will be largely unchanged in

kroner terms. It is also quite possible that households could react to the

upswing by increasing debt levels and thus pushing consumption growth

higher. The relatively strong increase in house prices so far this year has

clearly made that possibility more likely. However, there is also a real chance

that some households will use rising income to pay off their debt and thus

dampen consumption growth relative to our expectations.

Another aspect of this story is that during the crisis households increased

their pension savings to more or less match the fall in housing wealth.

However, pension savings are tied up and most of it will be taxed when paid

out – plus there is solid evidence to suggest households look much more

closely at the equity in their homes rather than their pension wealth when

planning consumption.

Exports set to contribute to growth in coming years


Heating consumption dragged private consumption

down in 2014

Source: Statistics Denmark and Danske Bank

Consumption recovery likely to be modest

Source: Statistics Denmark and Danske Bank

House prices have fallen, but not debt

Note: Not corrected for conversion of lump sum (capital) pensions.

Pension savings are excl. bank account savings. Data break in

2012.

Sources: Danmarks Nationalbank, Statistics Denmark, Realkredit

Danmark, own calculations

0

50

100

150

200

250

300

350

400

450

2000 2002 2004 2006 2008 2010 2012 2014

Debt Pension assets

Housing assets Other financial assets


Nordic Outlook

Prices rising faster

As we expected, inflation rose quite sharply in the opening months of the

year; from 0.1% in January to 0.6% at present – and the outlook is for the

upward trend to continue. The impact of the decline in the oil price will

gradually fall out of the statistic, which will instead be pulled higher by the

increase in the oil price since it bottomed out in January. The effect of the cut

in energy duties, which has lowered inflation by 0.2 percentage points, will

also disappear from 2016. Furthermore, the DKK weakening by 5% relative

to our trading partners between December 2014 and March 2015 will

increase import prices in Denmark, though the effect will be gradual and will

contribute to pushing inflation higher for an extended period. Underlying

inflationary pressures remain modest in Denmark, however, and as yet show

no signs of increasing. Wage growth is still modest, even though we expect it

to pick up slightly as employment increases. Real income does not look set to

experience the same solid growth in 2016, though rising employment will

help pull total household income higher.

Beware bottlenecks in the labour market

Employment has remained a bright spot in recent years. According to the

national accounts figures, the number of employed people rose by a further

5,400 from Q4 14 to Q1 15. Since bottoming out in Q2 13, total employment

has risen by 38,200 – the result of 44,600 new jobs being created in the

private sector, while the public sector has shed 5,400 jobs. Private sector

employment performing so well despite just modest GDP growth is in part

due to GDP growth being held down by less labour-intensive industries.

Hence, gross value added (GVA) in private sector non-farm and non-oil

industries has actually been positive every year since 2010 and showed

growth of 1.9% last year compared to total GDP growth of 1.1%.

We have been surprised by the pace of employment growth and now expect

more than 50,000 new jobs will be created between Q4 14 and Q4 16, taking

total employment to 2,830,000. We assume that job growth will mainly stem

from the private sector, but also expect public sector employment to rise

modestly, as this is assumed in the government’s economic policy.

Average gross unemployment fell to 126,600 or 4.8% of the labour force in

April this year. However, while gross unemployment has fallen, it has done

so at a somewhat slower pace than the pickup in employment. This is no bad

thing though, as it signals that the workforce is expanding. We forecast gross

unemployment to continue falling as employment rises, but still at a slower

pace, as we expect more people to enter the labour market due to improving

job prospects and as a result of various labour market reforms, such as the

changes to early retirement schemes. We forecast gross unemployment to fall

by a further 13,700 by the end of 2016. If we are correct, gross

unemployment will stand at 113,000 or 4.3% of the labour force, which is a

very low level of unemployment in historical terms. That employment

growth should come from the labour force means an increased risk of labour

market bottlenecks, as it is not certain the labour force can be expanded

relatively significantly in such a short space of time without creating regional

or professional bottlenecks. Hence, labour market flexibility should be a key

focus area in the coming quarters and years. It is worth pointing out here that

the normal warning signals such as wage pressure and pressure on the current

account are less effective at a time when there is labour immigration from the

rest of Europe and a structural surplus on the current account.

Inflation heading higher


Solid growth in private sector non-farm and non-oil

industries explains employment growth in recent

years


Higher economic growth will help lift employment


Government has consistently overestimated

number of public sector employees

Source: Statistics Denmark, Economic Survey, Danske Bank


Nordic Outlook

No scope for fiscal easing

General elections held in Denmark on Thursday 18 June resulted in a win for

the ‘blue block’ – the centre-right parties. As we write, negotiations to form a

new government have only just begun, so we do not yet know what the

economic policy of the future government will be. A change of government

in Denmark often does not result in any great change to short-term economic

policy and we expect this will once again be the case. Naturally, economic

policy differs between the political parties, but the budget and EU rules limit

the scope of politicians to act in the short term. Hence, our forecast for the

coming years is not particularly affected by the shift in government, although

it naturally constitutes a source of uncertainty with respect to our estimates

for government finances next year.

Last year was the first year since the financial crisis kicked off that Denmark

had a budget surplus – of DKK34.6bn, or 1.8% of GDP. The surplus was in

particular due to the bringing forward of a tax on pension savings and

extraordinary income from the PAL (pension yield) tax. However, Denmark

looks set to have a budget deficit again this year and next. We do not expect

the deficit to exceed the EU limit of 3% of GDP, but significant deficits mean

there is little scope for fiscal easing in the coming years. We estimate

economic policy will be tightened slightly in the coming years, which fits

well with the state of the economy.

Labour shortages could soon be looming again


Budget deficit close to � but below � EU limit



Nordic Outlook

Denmark: Forecast at a glance

Sources: Danmarks Statistik, Nationalbanken, Macrobond Financial, Danske Bank

National account 2013 2013 2014 2015 2016

DKK bn (current prices)

Private consumption 890.2 0.0 0.6 1.9 1.9

Government consumption 504.0 -0.5 1.4 1.0 0.3

Gross fixed investment 345.7 1.0 3.7 0.2 3.2

- Business investment 205.6 3.4 1.1 2.0 5.3

- Housing investment 70.7 -5.0 6.5 -2.4 3.3

- Government investment 69.3 0.3 8.6 -1.9 -3.2

Growth contribution from inventories -0.2 -0.2 0.3 -0.4 0.1

Exports 1023.8 0.8 2.6 3.4 4.9

- Goods exports 626.9 1.8 -0.3 5.8 4.7

- Service exports 396.9 -0.8 7.1 -0.3 5.2

Imports 915.5 1.5 3.8 1.9 4.6

- Goods imports 574.9 3.6 2.3 3.2 4.3

- Service imports 340.6 -2.0 6.4 -0.3 5.1

Growth contribution from net exports -0.3 -0.3 -0.5 0.9 0.5

GDP 1886.4 -0.5 1.1 1.7 2.1

Economic indicators 2013 2014 2015 2016

Current account, DKK bn 136.0 120.9 140.0 140.0

- % of GDP 7.2 6.3 7.1 6.8

General government balance, DKK bn -20.0 34.6 -20.4 -44.1

- % of GDP -1.1 1.8 -1.0 -2.1

General government debt, DKK bn 849.8 867.9 762.5 776.9

- % of GDP 45.0 45.2 38.6 37.9

Employment (annual average, thousands) 2748.8 2768.3 2791.4 2818.9

Gross unemployment (annual average, thousands) 152.9 134.6 125.1 116.8

- % of total work force (DST definition) 5.8 5.1 4.7 4.4

Oil price - USD/barrel (annual average) 109 99 66 78

House prices, % y/y 2.7 3.4 7.1 5.8

Private sector wage level, % y/y 1.2 1.3 1.6 2.2

Consumer prices, % y/y 0.8 0.6 0.7 1.7

Financial figures 24/06/2015 +3 mths +6 mths +12 mths

Lending rate, % p.a. 0.05 0.05 0.05 0.05

Certificates of deposit rate, % p.a. -0.75 -0.60 -0.50 -0.50

2-yr swap yield, % p.a. 0.27 0.15 0.15 0.25

10-yr swap yield, % p.a. 1.50 1.45 1.55 1.85

EUR/DKK 7.460 7.455 7.455 7.455

USD/DKK 6.67 7.17 7.03 6.78

% y/y

Forecast


Nordic Outlook

Sweden An ambivalent and reactive Riksbank set to miss its target Thus far in 2015, most economic developments have been in line with

what we chiselled out in December last year. Growth is improving in the sense that it is becoming increasingly more balanced as stronger external demand and a weak SEK are pushing exports up, while domestic demand growth (id est, mainly consumption and housing investment) is coming back down from the unsustainably high growth rates of yesteryear.

Inflation seems to be bottoming out and is expected to rise during H2, mainly due to statistical base effects as previous year’s sharp fall in energy and interest rate related costs are dropped from the inflation calculations. However, albeit expecting a pronounced rise in inflation during autumn, our forecast pales compared to the Riksbank’s path forward where inflation is calculated to rise by 1.75 percentage point (p.p.) from August to December.

Albeit directionally in line with the Riksbank’s forecasts for the Swedish economy, the above developments will pose a near-term challenge to the Riksbank. After undershooting the inflation target for long and by far, confidence in the inflation target has clearly deteriorated which is why the Riksbank has set its aim on coming across as ‘inflation nutters’.

In Sweden, centralised wage negotiations are widespread, deciding the level of wage inflation for considerably more than three million workers out of a total of less than five million workers. (Of course, there is room for some wage drift but that has rarely been a major issue in Swedish wage formation, especially when controlling the local wage bargaining agreements common among engineers et alia.)

The next wage bargaining round is concluded in the beginning of 2016 and inflation and inflation expectations are at historically low levels. In addition, both unions and industry organisations have expressed previously unheard of doubts about using the inflation target as an anchor for negotiations. In other words, the Riksbank has only limited time to push up inflation (-expectations) and should be extremely responsive to indications of negative developments vis-à-vis its preferred path forward or continued low inflation expectations among labour market participants.

Taken together, we believe that the continued lowflation prevalent in

our forecast and an acute need to lift inflation expectations, will be

sufficient to make the Riksbank act again. In relation to earlier

expectations we have, nevertheless, chosen to postpone policy action

to December.

Risks are still tilted to the downside and to earlier rather than later

policy action. In particular, we fear a swift SEK appreciation could

bring the Riksbank to act, even in the very near term.

Changes from previous forecast

Source: Danske Bank

Swedish economy at a glance

Source: Statistics Sweden (SCB). Danske calculations

Same same but different

Source: SCB, Riksbank. Danske calculations

The Riksbank trigger?

Source: National Institute for Economic Research (KI), Macrobond

% y/y 2015 2016 2015 2016

GDP, calendar adjusted 2.1 2.1 2.1 2.1



Gross fixed investment 5.3 3.6 6.0 3.8

Exports 3.8 5.3 5.5 4.9

Imports 4.9 5.2 6.6 5.1

Unemployment rate 7.8 7.6 7.7 7.5

Inflation 0.2 1.5 0.3 1.2


Current account, % of GDP 5.4 5.4 5.6 5.7


Sweden


Nordic Outlook

The binarities of external demand

The Swedish economy is continuing to perform well in relation to most other

developed countries. However, in order to make demand composition more

balanced and to make economic policy long term sustainable, external

demand will have to pick up the pace in coming quarters. Danske Bank’s

international forecasts do forebode strong(er) growth in many of Sweden’s

main export markets. Details in the forecast, however, paint a less exuberant

image of the export outlook. The Swedish export industry consists mainly of

investment and input goods, while international demand growth currently

seems to be a function mainly of consumption goods and services. Indeed, in

2014, preliminary GDP data showed that service exports grew an impressive

7.2% y/y, with R&D and tourism being among the main contributing

industries. In the goods exporting industries, so called merchanting (exempli

gratia, tri-party trading) was the main contributor.

That said, external demand is ameliorating and as the improvement in

international demand progresses, we expect growth to increasingly come

from investments (and input) goods, which should enhance the Swedish

export outlook. In addition, at current levels, the SEK is weak against most

major currencies, lending additional support to a more benign export outlook

– especially for the Swedish input goods industry. Export orders have been

on the rise, over the past few months, and we take note of several leading

export companies having announced production increases during spring.

Also, despite the expected recoil in Q1 15, services exports should continue

on a strong note throughout the forecast horizon.

World market growth, id est the weighted import growth on Swedish export

markets, is calculated to gradually approach, and even exceed, 5% y/y at the

end of the forecast horizon. This implies that 2015 should mark the last year

with falling market shares for Swedish export industries, as Swedish export

growth is finally calculated to surpass market growth. Needless to say, given

renewed worries about Greece and recurrent skirmishes between the fighting

parties in Ukraine, risks to this forecast are tilted to the downside.

In quantitative terms, Swedish export growth is expected to rise 3.5 % y/y

(vol., cal. adj.) in 2015 and 5.0% y/y (vol., cal. adj.) in 2016.

Financial conditions to remain supportive

In line with developments in international financial markets, Sweden has

experienced a very high volatility in (longer-dated) interest rates and FX

markets during the first half of 2015. However, short-term interest rates are

fixed at low – even negative – levels due to the Riksbank’s repo rate

currently standing at -0.25%. The far below target inflation has made us, and

financial markets, believe that current low rates are here to stay for a longer

period of time. To be certain, we have a hard time identifying any near-term

risks that could push underlying inflation and short rates upwards and the

renewed volatility in the longer interest rate spectra and in FX markets, while

noteworthy, is apparently stuck in a wide but constructive range from a

Swedish standpoint.

Stock markets have risen strongly for a longer period of time which is why

we need to acknowledge some downside risks to our outlook. Partly due to

these risks, we expect the pace of gains to moderate and gradually align to

nominal GDP-growth.

GDP and investments growth on Swedish export

markets

Source: National Institute of Economic and Social Research

(NIESR), Macrobond. Danske calculations

World markets and Swedish exports

Source: NIESR, SCB, KI. Danske calculations

Financial conditions remain supportive

Source: Macrobond. Danske calculations


Nordic Outlook

Housing markets are taking out new highs by the day it seems and we have

long highlighted the risk of a major correction of 20-30%, where we believe a

fundamentally warranted price level is located. Simultaneously taking into

account an institutional lack of affordable housing, we have opted for a more

gradual, smoother, adjustment process with incomes rising and prices only

slowly dropping, eventually reaching a sustainable equilibrium a few years

hence.

Turning, lastly, to the fiscal situation, we do expect fiscal policy to become

less supportive to growth over the coming years as the fiscal targets, in

particular the surplus target, have become increasingly strained. The cyclical

improvement has not sufficed to restore government tax incomes to pre-crisis

trends or levels and a large influx of immigrants weigh on public

expenditures, even though the net economic impact on Sweden’s economy

may be positive. Views on the amount of saving necessary to restore the

surplus target is diverging but calculations from the semi-independent

National Institute for Economic Research suggests a need for structural

savings of close to SEK100bn over the coming years.

To sum up, despite increased volatility and in the presence of downside risks,

we expect financial and economic conditions to remain strongly supportive to

growth way past the forecast horizon.

Not only housing investments

Disregarding a temporary boost to R&D investments during the latter part of

last year, investments growth has been very weak in private sectors in the

wake of the financial crisis. The main exception, in particular over the past

couple of years, has been housing investments that have even increased some

25% y/y certain quarters! Investments have not been bad in service sectors

but far from what could have been expected when studying, exempli gratia,

growth in service industries (and exports). Public investments in various

infrastructure projects and other large scale projects instigated in the wake of

the crisis are now on a downward trajectory and we do not expect this trend

to shift much over the forecast horizon.

However, as capacity utilisation is increasing and as the export outlook firms

on the back of more benign international developments, we expect business

investments to finally pick up pace as well. Housing investment growth,

though, is expected to decelerate over the coming quarters. All in all,

investment growth is expected to reach 4.9 % y/y (vol., cal. adj.) this year

and to come in a tad lower, at 3.2% y/y (vol., cal. adj.), in 2016.

Frugal Swedish households

Last year, private consumption increased 2.5% y/y (vol., cal. adj.) and strong

consumption growth has been a trait of the Swedish economy ever since the

international financial crisis struck in 2008. This has many explanations,

lower tax burden, lower interest rate costs, increased wage share of GDP,

strong immigration, wealth effects from housing and stock markets etc.

However, this has also gone hand in hand with a very high savings ratio,

currently above 15% of disposable incomes, which has more than doubled

from 2008 until now. Most forecasters assume and have assumed that this

situation would ‘normalise’, meaning the savings ratio would/will decrease

and consumption – hence – increase as the labour market situation improves.

Asset prices are soaring, risks are building

Source: Macrobond

Fiscal policy is overly expansionary

Source: SCB, KI Danske bANK calculations

Domestic demand has driven Swedish GDP-growth

Source: SCB, KI Danske Bank calculations

High savings ratio remains the main upside risk

Source: SCB, KI. Danske Bank calculations


Nordic Outlook

Since the employment continues to be benign, wages are expected to increase

further and most evidence points towards continued decent demand growth,

the consumption outlook is almost by default only a question of how

optimistic you feel. Alas, we continue to foresee a high degree of uncertainty,

low to negative wealth effects, further fiscal contraction, low wage increases

and have all sorts of sombre views on the future, which is why our forecasts

for private consumption, albeit still respectable from a historical perspective,

imply a diminishing contribution to growth from consumption.

In numbers, in both 2015 and 2016, private consumption growth is forecasted

to come in at 1.9% y/y (vol., cal. adj.), suggesting, inter alia, a virtually

constant savings ratio in coming years.

Imports and GDP

Due to strong domestic demand, imports have been growing steadily over the

past years. Imported content is high also in exports, which is why we see no

reason to expect a dramatic change in import growth over the forecast

horizon. In 2015 imports are expected to grow 4.5% y/y (vol., cal. adj.) and

in 2016 we estimate an even higher import growth, 4.9% y/y (vol., cal. adj.).

Net exports will thus start to contribute strongly from now on and over the

forecast period, but leave, as year average a -0.3 p.p. y/y (vol., cal. adj.)

contribution on growth this year and a 0.2 p.p. (y/y) positive contribution to

growth in 2016.

Summing up the various components discussed above, we reach a GDP-

estimate somewhat below market consensus and the Riksbank but it is still

decent when comparing to other economies and post-crisis developments. It

is particularly pleasing to see a more balanced demand, as current domestic

developments would be unsustainable from a longer-term perspective given

the substantial (unsustainable) economic policy stimuli to domestic demand.

All in all, GDP is expected to come in at 2.1% y/y (vol., cal. adj.) in both

2015 and 2016 but, again, with a gradually improved composition.

Resource utilisation, inflation and the Riksbank

If only we could call it a Freudian slip but we are honestly and genuinely

uncertain about the future for resource utilisation and inflation and thus also

about the ‘Risk’bank. The unemployment rate is elevated and current

inflation is unarguably low. However, the explanation for the high

unemployment rate is not only an increased number of unemployed in the

wake of the financial crisis, but also due to a very strong influx of immigrants

with an unknown skill set and thus, perhaps, questionable employability on

Swedish labour markets. In this respect we are quite optimistic as many of

the jobs added after the crisis are to be found in the low-skilled service

sectors and an unusual high percentage of the new entrants have post-

secondary education.

High import content in exports


GDP, hours worked and productivity



Nordic Outlook

Together with a seemingly low utilisation of capital (i.e., machinery etc), our

belief is that resource utilisation is still low, despite us sporting a low

potential GDP-growth (of 1.5-1.75% y/y). The low resource utilisation

explains the low current inflation but the low potential growth implies that

even our below consensus forecasts of actual GDP will suffice to narrow the

output cap throughout the forecast horizon. It is only, however, late 2017 –

beyond the forecast horizon that the output gap reaches balance and we

foresee an underlying inflation closer to the inflation target.

In the near term and due to statistical base effects from the dramatic fall in

energy prices last autumn, we foresee a pronounced rise in inflation over the

coming months. In our forecast, (CPIF) inflation rises from -0.3% (in June)

to above 1½% y/y in January 2016. Thenceforth, inflation will again ebb – at

least in the medium term – as true inflation, wage inflation, is set to come in

all too low to produce the underlying inflationary impetus necessary to reach

the inflation target. Together with still weak pricing power in large parts of

the business sector, we believe that the inflation target is a long way hence, at

least when looking at core inflation measures. Overall, inflation is set to

average 0.2% y/y in 2015 and 1.3% y/y in 2016.

The Riksbank should be able to see through the energy-driven near-term rise

in inflation which we, to be sure, expect will be less dramatic than what the

Riksbank is forecasting. And with the Riksbank concentrating on its inflation

nutter credentials, particularly in the run up to the conclusion of the wage

negotiations, we expect the Riksbank will not be satisfied at all. In short, we

still expect the Riksbank to increase the monetary policy accommodation (a

10bp cut at the December meeting). It is a pity it is too late.

Under any circumstances, we continue to hold a strong SEK as the main risk

for early policy actions and we would also like to underline that

developments of external demand are key to forming an opinion on the future

of Swedish economic policy. In terms of domestic demand, economic policy

is already a success.

Resource utilization remains low

Source: SCB, KI. Danske calculations

�Lowflation� becoming a permanent trait of the

Swedish economy?

Source: SCB, Riksbank. Danske calculations

Sub zero rates and no thaw in sight

Source: Riksbank. Danske calculations


Nordic Outlook

Sweden: Forecast at a glance

Note: The national account figures relates to actual growth rates (i.e. not calendar adjusted or wda)

Source: Danske Bank

National account 2013 2013 2014 2015 2016

SEK bn (current prices)

Private consumption 1718.2 1.9 2.4 2.0 2.0

Government consumption 955.7 0.7 1.9 1.6 1.1

Gross fixed investment 674.2 -0.4 7.4 5.3 3.6

Growth contribution from inventories -4.4 0.0 0.2 0.1 0.0

Domestic demand 3348.1 1.0 3.4 2.7 2.1

Exports 1722.4 -0.2 3.3 3.8 5.3

Aggregate demand 3343.7 1.1 3.6 2.7 2.1

Imports 1516.4 -0.7 6.6 4.9 5.2

Growth contribution from net exports 206.1 0.2 -1.1 -0.3 0.2

GDP 3549.7 1.3 2.3 2.3 2.3

GDP, calendar adjusted 1.3 2.4 2.1 2.1


Trade balance, SEK bn 142.2 123.5 107.3 121.4

- % of GDP 3.8 3.2 2.6 2.9

Current Account, SEK bn 260.4 224.9 220.7 228.3

- % of GDP 6.9 5.7 5.4 5.4

Public sector savings, SEK bn -45.3 -82.2 -73.0 -37.9

- % of GDP -1.2 -2.1 -1.8 -0.9

Public debt ratio, % of GDP* 38.7 43.9 44.5 44.8

Unemployment, % of labour force 8.0 7.9 7.8 7.6

Hourly wages, % y/y 1.9 2.8 2.8 2.5

Consumer prices, % y/y 0.0 -0.2 0.2 1.5

House prices, % y/y 3.6 5.0 -3.0 -2.0

* Maastricht definition

Financial figures +3 mths +6 mths +12 mths

Repo rate, % p.a. -0.25 -0.25 -0.35 -0.35

2-yr swap yield, % p.a. -0.04 0.05 0.00 0.00

10-yr swap yield, % p.a. 1.61 1.60 1.70 1.95

EUR/SEK 9.2 9.3 9.2 9.0

USD/SEK 8.2 8.9 8.7 8.2

24/06/2015

% y/y

Forecast


Nordic Outlook

Norway The end is in sight The decline in oil investment is now having a very clear impact on the

economy and there are some signs of second-round effects. The worst

is probably still to come, with higher unemployment and more

bankruptcies.

Oil investment now looks set to flatten out next year, which should

mean that the bottom is reached in the autumn.

A much weaker Norwegian krone has also offset much of the impact

of lower oil investment.

The central bank’s rate cuts are working as intended, with both

private consumption and housing investment on the increase.

Unemployment is set to increase but we believe it will be limited by

economic adaptation and a flexible labour market.

One unknown is the amount of excess capacity in the supply sector.

Norges Bank lowered its key rate again in June and is signalling a

good chance of further reductions but we believe interest rates have

hit the bottom.

The NOK should gradually strengthen again as oil investment

flattens out.

The wage model also appears to be working, as wage growth is

slowing without unemployment rising.

Beginning of the end

Growth in the Norwegian economy was surprisingly strong in Q1 but the fall

in oil investment since late 2013 is now beginning to affect oil-related

industries seriously. Nevertheless, we expect the downturn to be both mild

and short-lived.

For one thing, the Norwegian economy is actually relatively robust, even

against large swings in the oil price. The decline in the Norwegian krone that

has accompanied the slide in oil prices has given the export industry a lift.

The central bank’s rate cuts have also increased households’ purchasing

power and contributed to higher private consumption and housing demand,

so boosting housing investment. Together with expansionary fiscal policy

and continued positive bank lending policies, this has helped limit the

second-round effects of the fall in oil prices. Although unemployment has

begun to rise, the increase has not been as bad as many feared and has been

confined largely to oil-related industries and oil-dominated regions.

For another, oil prices have moved off the bottom and the oil investment

survey suggests oil investment will flatten out next year. This may mean that

the deterioration in the economy in the spring proves to be the beginning of

the end for the oil-driven downturn in Norway. This also has implications for

financial markets, as we believe interest rates have hit the bottom and that the

krone is set for a prolonged uptrend.

Changes from previous forecasts


Growth slowing

Source: Statistics Norway, Danske Bank Markets

% y/y 2015 2016 2015 2016

GDP (mainland) 1.5 2.3 1.7 2.2



Gross fixed investment -1.8 1.9 -6.5 1.0

Exports 1.6 1.5 2.5 1.0

Imports 3.4 3.0 1.0 3.0

Unemployment (LFS) 4.0 3.8 3.7 3.7

Inflation 2.1 2.0 2.8 2.0


Norway


Nordic Outlook

Looking ahead two to three years, we still believe oil prices will have to

return to levels that will make the upcoming development of new fields in the

North Sea profitable. This is not, therefore, the start of a long-term decline in

the Norwegian oil sector but a short, sharp correction that will soon be

history.

Oil-related industries hit hard

Oil investment has been in decline since late 2013 and will probably continue

to fall through to spring 2016. This has put a dampener on economic

expansion but the slowdown appears to have gone largely as we expected in

March despite a deterioration in oil-related industries. It is very encouraging

that the second-round effects still seem to be moderate. Indeed, we are seeing

signs of consumption growth accelerating and of housing demand holding up

and helping push up housing investment. The weaker krone and continued

gradual global economic recovery have also meant that mainland exports are

still growing. Mainland GDP grew 0.5% q/q in Q1, more or less in line with

last year, but Norges Bank’s regional network survey is suggesting somewhat

weaker growth over the summer. We now expect mainland GDP to grow

1.5% this year, slightly less than forecast in Nordic Outlook: March 2015, 25

March.

Unemployment is beginning to rise but the increase is still confined to oil-

related industries and oil-dominated regions. Although employment has

stopped climbing, slower growth in labour supply will restrict the increase in

unemployment. This last factor seems to be due largely to net immigration

having fallen in response to the slacker labour market, which illustrates how

flexible the Norwegian labour market has become since the enlargement of

the EU in 2005.

The most important change since Nordic Outlook: March 2015 comes from

the oil investment survey. The oil companies have revised up their estimate

for this year slightly but we are still looking at a decrease in oil investment of

13%. On the other hand, the survey now suggests that oil investment will be

more or less unchanged in 2016, whereas we previously forecast a decrease

of 5% y/y. Besides pushing up our GDP forecast for 2016, this also removes

some of the downside risk to the Norwegian economy.

As mentioned above, the decline in oil investment since late 2013 is now

plain to see in activity in oil-related industries. New orders have dried up,

profitability has fallen and the focus is on cost cutting and downsizing. This

is now resulting in lower industrial production and a decrease in overall

business investment. One positive, though, is that the first contracts for the

new Johan Sverdrup oilfield have been awarded mainly to the Norwegian

supply sector.

We also expect oil prices to begin to climb after the summer, with the result

that oil investment should also stabilise gradually elsewhere in the world.

With several relatively large projects due to start up from late 2015, we

expect the fall in oil investment to be short-lived rather than mark the start of

a long-term decline in the Norwegian oil sector. Internal cost-cutting and

lower costs for rig hire have also pulled down breakeven levels for all

projects. This means the need for economic reorganisation will be limited,

which will decrease the downside risk for now.

Weaker growth over the summer

Source: Norges Bank

Oil investments will be more or less unchanged

next year

Source: Statistics Norway, Danske Bank Markets

We expect oil prices to climb further

Source: Macrobond


Nordic Outlook

The krone has remained weak since Nordic Outlook: March 2015. Together

with slightly stronger global growth, this has boosted the export industry

through higher activity and profitability. Mainland exports grew 6% y/y in

Q1 and the (nominal) figures for April and May suggest that exports

improved somewhat further in Q2.

The downturn in oil-related industries nevertheless appears to be dominating

investment activity in the business sector. Although the manufacturing

investment survey suggests somewhat higher levels in that sector, there are

indications that investment in the service sector in particular is being hit by

the oil slowdown. Orders for commercial buildings, for example, have fallen.

Therefore, we still expect business investment to fall 1% this year but grow

again next year.

Although consumer confidence has fallen to levels last seen during the

financial crisis of 2008-09, growth in private consumption accelerated to

0.6% q/q in Q1 and April retail sales point to an even higher rate of growth in

Q2. While we suspect the April figures were on the high side due to the

timing of Easter, anecdotal evidence for May and June does not point to any

collapse. Therefore, we expect private consumption to grow 2.0% this year,

which is somewhat higher than we previously predicted. Our forecast for next

year is still 2.0%.

Higher unemployment and dwindling consumer confidence have not had any

negative impact on demand for housing either. Quite the opposite, it seems

that the housing market has tightened, with rising prices, falling time to sell

and higher turnover. Sales of new homes have also increased, pushing up

homebuilding activity. Housing investment climbed 0.9% q/q in Q1 and the

data for housing starts and orders suggest that this trend has continued into

Q2. This is entirely in line with our expectations and we still predict growth

in housing investment of 3% both this year and next.

Housing market on fire

The housing market remains tight. Although prices have slowed somewhat

over the past couple of months, time to sell is still falling and turnover is high

relative to the stock of unsold homes. The prospect of interest rates falling

further and remaining low for a long period may have affected price

expectations and pushed prices up more than the December rate cut alone

would warrant.

Lower rents in Oslo, combined with a sharp rise in prices for small city

centre apartments, could reflect a strong shift from renting to owning among

the under 30s. This would indicate that the shortage of housing is not as acute

as the rise in prices might suggest.

We are also seeing clear signs of homebuilding beginning to react positively

to rising prices. The trade reports that sales of new homes are up 32% on last

year and Statistics Norway’s data show a 28% increase in housing starts in

the first four months of this year.

We believe that an increase in the supply of homes will help dampen housing

price inflation later this year and into next year. The new mortgage rules may

also help rein in growth in demand somewhat but we do not think that they

will be enough to slow demand sufficiently.

Increase in orders set to boost housing investment

Source: Statistics Norway

Housing market stays warm

Source: Real Estate Norway


Nordic Outlook

On balance, we consider the risk of a serious downturn in the housing market

is still relatively limited in the short term despite weaker economic growth

and slightly higher unemployment. Lower real wage growth will be more

than offset by lower interest rates, with the result that households’ debt-

servicing capacity will actually improve.

Unemployment set to peak early next year; wage growth set to slow

Unemployment has risen slightly further than we expected in Nordic

Outlook: March 2015, 25 March. It is mainly in oil-related industries and oil-

dominated regions that the number of jobless is rising and the increase in

other regions and sectors has been limited to date. According to the

Norwegian Labour and Welfare Administration (NAV), for example, the

entire increase in registered unemployment over the past year has been in

Rogaland, the heart of the offshore industry.

The two sources of jobless data also paint rather different pictures: while the

NAV figures show an increase of around 5,000 people, Statistics Norway’s

labour force survey suggests an increase of almost 25,000. We normally set

most store by the NAV’s figures, which show the number of people actually

registered as unemployed, whereas the LFS numbers are survey based and

therefore will always be associated with more uncertainty. Historically, the

NAV statistics have also presented a much more stable and accurate picture

of developments in the labour market than the LFS. On the other hand, the

use of severance packages in the oil sector means that the LFS may be better

at capturing the rise in unemployment there.

Either way, the rise in unemployment is being tempered by overall economic

growth holding up relatively well to date thanks to stronger growth in other

sectors. The Norwegian labour market has also become very flexible since

the enlargement of the EU in 2005. Net immigration has fallen by more than

10,000 since last year, curbing growth in the labour supply and keeping

unemployment down. On top of this, many of the jobs that have disappeared

in the oil sector were held by temporary foreign workers who are now

heading home without showing up in any of the jobless data.

We expect unemployment to rise somewhat in H2 as the slowdown in oil-

related sectors intensifies. However, we also expect the decline in oil

investment to flatten out early next year, which may mean the weakest period

in the labour market is through to next summer. In this case, we believe

unemployment will peak in H1 next year.

As expected, the Norwegian wage model appears to be working. The national

talks led to very moderate increases. The fall in oil prices will also erode

profitability in many industries, which will affect the wages they pay.

Together with rising unemployment, this will probably result in low local pay

increases too. Therefore, we expect wage growth to end up around 2.7% this

year and 3.0% next year.

Rise in unemployment still moderate



Nordic Outlook

Inflation holding up

Core inflation has held just below 2.5% over the past year but has fallen

somewhat lately despite higher imported inflation. This is probably because

the economic downturn has put a dampener on cost increases and squeezed

margins in the retail trade. The fall in inflation in March and April also

seemed to be linked to unusually weak movements in Norway’s ever-volatile

food prices and airfares. The May figures indicate a degree of normalisation,

with core inflation returning to 2.4% y/y.

We expect the underlying price drivers – lower wage growth and higher

productivity growth – to dampen domestic inflation further but the

deterioration in the krone in the spring will push up import prices over the

autumn and winter. Higher energy prices will also feed through gradually

into higher prices for both inputs and finished goods at importer level in

Norway. Therefore, we expect core inflation to hold around 2.25% y/y before

beginning to drift down towards 2.00% at the end of the year.

No more rate cuts; krone set to rally strongly

As expected, Norges Bank cut its key rate to 1.0% at the meeting on 18 June.

This was no surprise but the bank also signalled a significant chance of

further reductions, mainly because the growth outlook for the Norwegian

economy is weaker than previously thought. The latest regional network

survey results confirm that growth this year will probably be lower than

previously assumed and the bank also lowered its forecast for mainland GDP

next year despite an upward revision of the estimate for oil investment. The

change in the growth forecast for next year was due almost entirely to a

downward revision of private consumption despite unchanged projections of

real wage growth and unemployment.

It seems that the central bank is now much less worried about the risks to

financial stability from rapid growth in housing prices and credit. This is

probably a result of the government unveiling tougher new rules for banks’

mortgage lending. The Ministry of Finance has also announced that the

countercyclical capital buffer at banks is set to rise from 1.0% to 1.5%, partly

to ease the pressure in the housing market through tighter credit policies

and/or higher interest margins. However, when the buffer was first

introduced, it hit lending to businesses and had only a marginal impact on

lending to households, so this seems a very risky policy in the current

climate. Fortunately, it seems that banks are largely on course to meet higher

capital requirements, so with luck the effect will only be moderate.

Nevertheless, we believe that interest rates have now hit bottom and believe

that the growth outlook, even if it deteriorates, will not be as bad as Norges

Bank fears. We are also very doubtful whether the measures announced to

slow housing prices will work as intended. If they do not, growth in both

house prices and credit will be higher than the central bank is assuming.

Lower wage growth to ease upward pressure on

inflation


Negative rates not on the cards

Source: Norges Bank, Danske Bank Markets


Nordic Outlook

In the short term, we expect the krone to remain relatively weak, due to

expectations of further rate cuts and limited liquidity over the summer

months. On a six-month view, however, we expect the data to show gradual

stabilisation of the Norwegian economy and continued pressure on the

housing market. We also expect oil prices to climb during the period. This

would exert upward pressure on the krone towards the end of this year and

into 2016.

In the longer term, we are setting great store by the oil investment survey

now suggesting that oil investment in the Norwegian sector will flatten out as

early as next year. If so, the downturn in the Norwegian oil sector is drawing

to a close and we can see both the cycle bottoming out and unemployment

peaking next spring. We would then be looking at a relatively prolonged

uptrend in the krone once the worst of the dust has settled.

NOK expected to appreciate

Source: Norges Bank, Danske Bank Markets


Nordic Outlook

Norway: Forecast at a glance

Source: Danske Bank

National account 2013 2014 2015 2016

NOK bn (2012 prices)



Gross fixed investment 704.8 0.6 -1.8 1.9

Petroleum activities 204.5 -1.7 -14.0 -2.5

Mainland Norway 492.2 1.7 0.5 4.4

Dwellings 149.2 -1.6 2.0 3.5

Enterprises 220.6 0.2 -2.0 1.5

General government 122.5 8.2 3.5 2.5

Mainland demand 2675.2 2.1 1.2 2.3

Growth contribution from stockbuilding 0.2 0.7 0.1

Exports 1168.5 2.7 1.6 1.5

Crude oil and natural gas 564.2 1.5 -1.0 0.0

Traditional goods 312.5 2.3 3.3 3.0

Imports 856.6 1.9 3.4 3.0

Traditional goods 508.1 -0.3 2.5 2.9

GDP 2987.2 2.2 1.5 1.9

GDP Mainland Norway 2347.2 2.2 1.5 2.3

Economic indicators 2014 2015 2016

Employment, % y/y 1.1 0.3 0.9

Labour force, % y/y 1.1 0.8 0.7

Unemployment (LFS), % 3.5 4.0 3.8

Annual wages, % y/y 3.1 2.7 3.0

Consumer prices, % y/y 2.0 2.1 2.0

Core inflation 2.4 2.5 2.2


Repo rate, % p.a. 1.00 1.00 1.00 1.00

2-yr swap yield, % p.a. 1.26 1.30 1.30 1.40

10-yr swap yield, % p.a. 2.34 2.30 2.40 2.70

EUR/NOK 8.79 8.50 8.25 8.15

USD/NOK 7.86 8.17 7.78 7.41

24/06/2015

% y/y

Forecast


Nordic Outlook

Finland Signs of a slow recovery We have largely kept our forecast unchanged and expect Finnish

GDP to grow by 0.5% in 2015. Exports have grown disappointingly

slowly, but private consumption surprised on the upside in Q1. We

continue to expect modest growth in exports on the back of growth in

western markets, despite weak Russian demand.

The outlook for domestic demand continues to be dull. Household

purchasing power remains weak, due to unemployment and a

moderate wage agreement. A fall in consumer prices boosted private

consumption in early 2015, but the impact is unlikely to last.

Investment activity is also weak, but manufacturing capex shows

early signs of a recovery.

The new conservative three-party government is reform oriented and

fiscal policy will be tightened significantly. The government aims to

adjust public finances by a total of EUR10bn with a combination of

short-term and long-term measures. An investment package worth

EUR1.6bn will soften the negative blow from frontloaded

expenditure cuts, but growth is set to slow down in 2016. Failure to

carry out major reforms could put Finland on a slow growth path

and lead to a downgrade of sovereign ratings.

The government aims to achieve a ‘social contract’ in which annual

working hours would be extended, locally negotiated wage

agreements encouraged and income tax rates cut. Unit labour costs

should fall by 5% at least. The aim is to improve cost competitiveness

by an internal devaluation. Negotiations with the labour unions are

set to be tough this summer.

The housing market outlook is dull, and prices have decreased, but

trade volumes stabilised during the spring. Cautious supply of new

housing and low interest rates are helping to keep housing prices

relatively stable.

Thanks to manageable debt levels and low interest rates, the weak

GDP figures have not translated into a full-scale depression with

mass unemployment, bankruptcies and credit losses. Loan

performance has started to deteriorate recently, but from a very

strong position.

Despite a rising debt level, weak growth outlook and slow pace of

reforms, Finland continues to enjoy one of the lowest risk premiums

compared to Germany. Relative to other euro countries, Finnish

public finances are still among the best and the ECB’s expanded

asset purchase programme is large compared to the supply of bonds.

Changes relative to previous forecast


% y/y 2015 2016 2015 2016

GDP 0.5 1.4 0.5 1.5


Public consumption 0.0 -0.5 0.0 0.0

Gross fixed investment -2.0 3.0 -1.5 3.0

Exports 2.0 4.0 3.0 4.0

Imports 1.0 2.5 1.5 2.5

Unemployment rate 9.2 9.0 9.0 8.8

Inflation 0.2 1.0 0.3 1.0


Current account, % of GDP -1.0 -0.7 -1.2 -0.7

Finland



Nordic Outlook

The economy is crawling well below potential output

The Finnish economy contracted for the third year in a row in 2014, when

gross domestic product was 0.1% smaller than in 2013. According to

preliminary data, 2015 started weak as well; GDP decreased in January to

March by 0.1% from the previous quarter. Compared with the first quarter of

2014, GDP adjusted for working days was flat. The economy is crawling well

below potential output and the recovery in the euro area has not reached

Finland yet. The situation has not improved much in recent months.

Industrial production and retail trade were down in April. On the positive

side, manufacturing new orders returned to growth in March-April and

several companies have announced large capex plans. We expect net exports

to EU countries and the US to pull GDP on a positive trend in 2015, but

domestic demand is likely to remain stagnant. Lower energy prices and a

weaker euro support the Finnish economy, but weak exports to Russia and

government expenditure cuts produce headwinds.

Figures for private consumption were stronger than we expected during the

first quarter. In the first quarter, the volume of private consumption grew by

1.0% q/q and by 1.2% y/y. The fall in consumer prices in January-April

improved household purchasing power, but this impact is likely to disappear

later in 2015. Purchasing power has also been boosted by amortisation-free

months, which a few large banks (including Danske Bank) have been

offering actively for housing loan customers. These should bring an

estimated total EUR0.5bn to consumers’ pockets over a year. Investments fell

by 0.3% q/q and by 4.6% y/y. Public consumption expenditure was flat

versus the previous quarter but decreased by 0.3% y/y. Exports were flat y/y,

although goods exports were slightly down. Russia has been the weak spot in

exports, while exports to Germany and the US have grown.

Confidence indicators have improved lately. Consumer confidence rose very

close to the long-term average in May, but consumers are still pessimistic

about employment and disinterested in house or car purchases. Retail trade

and construction confidence have also improved, but are below normal.

Manufacturing confidence has been stable in recent months, but export

expectations have risen.

Assuming that the US leads a global recovery and the euro area is also

gaining strength, we expect output to resume slow growth in 2015. We have

broadly kept our GDP growth estimate unchanged for both 2015 and 2016.

We expect public consumption to shrink in 2016 and unemployment to rise

slightly more. We forecast GDP to grow only 0.5% in 2015 and 1.4% in

2016.

Consumers surprisingly positive Households’ ability and willingness to consume are restricted by many

factors. Unemployment is high and, in particular, long-term unemployment is

rising. Real wage growth has been weak. Taking into account these factors,

consumers have been surprisingly positive. Consumer confidence has been

rising for several months and is now above its long-term average.

Also, private consumption was stronger than expected in Q1, growing by

1.2% y/y (though the level is still low). Low interest rates and low – even

negative - inflation have been supporting consumers. In February this year,

Finnish banks started to grant mortgage holders a year free-of-repayments,

which also have had – and will have – a positive effect on consumption.

New orders regained strength in April

Source: Statistics Finland

Confidence has strengthened

Source: Confederation of Finnish Industries EK, European Commission

Inflation and wage growth continue to decline



Nordic Outlook

More positive news from the world economy and the new government, which

was formed in May after elections, might also support consumer optimism.

The Russian slowdown has several implications for Finland. Russians are by

far the largest group of foreign citizens visiting Finland, as nearly 50% of

foreign tourists came from Russia in 2012. In particular, the retail trade,

hotels and local service businesses in Southeast Finland rely on Russian

consumers. Most recent statistics indicate that overnight stays by Russian

tourists fell by almost 50% y/y in Q1. The strengthening of the rouble seen

early in the year might soften the downturn.

The outlook for private consumption in 2015 is still quite weak, even if it

took us by surprise by growing in Q1. The latest data does not support the

view that growth should continue in Q2. Retail trade decreased by almost 3%

y/y in April. The registration of new cars also went down by 9.9% y/y in

May. Part of this weakness is explained by the planned tax change.

Household purchasing power is likely to remain flat at best due to

unemployment and a very moderate wage agreement announced on 15 June.

Most salaries will rise 0.43%, or at least EUR16 per month, in 2016.

Low interest rates and low inflation will help to sustain activity. Some

positive effect is also coming from the free-of-repayments campaign. We

expect private consumption to increase modestly by 0.6% in 2015 and 0.5%

in 2016.

Exports weak despite a growing global economy

Among euro area economies, Finland is a rare example of a country that has

not seen much real growth in exports in three years. In the first quarter of

2015, exports of goods decreased by 1.3% y/y as exports of services

increased by 3.5% y/y. Overall, total exports were flat. Exports to Germany

and the US have held up quite well, but exports to Sweden, the UK and

especially to Russia have decreased. The relative share of Russia has

decreased dramatically since the Ukrainian crisis and Russia is now the sixth-

largest export destination country.

Exports of goods have suffered long-term damage from the decline of Nokia

and forest industries. Nokia phones are now gone and that impact is

disappearing. Exports have also suffered from a high share of investment

goods, which have been in short demand globally, falling demand for

newsprint, and poor price competitiveness caused by wage increases between

2008-2012. The new government aims to achieve a ‘social contract’ in which

annual working hours are extended, locally negotiated wage agreements

encouraged, and income tax rates cut. Unit labour costs should fall by at least

5%. The wage agreements for 2015-2016 are very modest. The aim is to

improve cost competitiveness by way of internal devaluation.

The shorter-term outlook for the main Finnish export markets (Germany,

Sweden, the US) has remained relatively good, with Russia being an

exception. The weakening of the euro should help exports to the US. The

Swedish krona and Russian rouble have weakened even more, so there the

currency does not give any tailwind. Russia is slipping into a recession. We

expect Russian GDP and imports to fall significantly in 2015, which keeps

the export outlook poor. But if the Russian economy starts to recover later

this year as expected, the worst might be behind us by the end of this year.

Russian trade has been volatile in the past too. The collapse of trade with the

Soviet Union was a major reason behind the Finnish depression in the early

Trade with Russia is volatile

Source: Finnish Customs


Nordic Outlook

1990s. The Russian crisis in 1998 nearly halved Finnish exports to Russia,

but that time Finland did not suffer a recession, because other exports

performed well.

Poor manufacturing confidence and low order book levels suggest that

exports continue to perform modestly at best in 2015. However, the future-

looking export expectations in industry are surprisingly high. Assuming a

continued recovery in the euro area and a brighter global outlook, we expect

exports to rise by 2% in 2015. The negative impact from the Russian

recession should abate in 2016, which would allow Finnish exports to grow a

little faster, i.e by 4%. If pent-up investment demand is released in Europe

and Finland regains competitiveness through falling unit labour costs, exports

could grow relatively fast in the medium term.

Finland had a current account surplus from 1994 to 2010, but fell with the

trade balance into a small deficit in 2011. We expect a current account deficit

also in 2015-2016, driven by large net transfers. The cuts in development aid

planned by the new government should reduce the current account deficit a

bit. The trade balance has actually been balanced, thanks to falling imports.

The current account deficit is forecast to narrow to 1.0% of GDP in 2015.

Early signs of recovery in investments

After falling 5.1% in 2014, investments fell by 4.6% y/y or by 0.3% q/q in

Q1. Private investments declined by 3.8% and government investments by

7.3% y/y. Housing construction investments fell by 4.6%, while the volatile

machinery, equipment and transport equipment investments shrank by 5.3%

y/y. After the new national account system (ESA 2010), a new subsection

was added to investments: cultivated biological resources and intellectual

property products, which includes especially R&D activities. These

expenditures are significant – around the size of machinery, equipment and

transport equipment investments combined. R&D activities tend to be more

stable over business cycles, but these expenditures have suffered from Nokia-

related cuts in recent years. R&D recorded a 3% drop in Q1 15. Thus,

Finnish companies have cut investment in all forms of capital.

The future might be less bleak. Construction confidence has improved and

the number of building permits rose 4% y/y in Q1. Several companies have

announced large capex decisions in the past few weeks. These plans include

pulp and packaging material investments in the forest industry, which

continues to reduce capacity in printing paper. However these investments

will have direct effects only after 2015. An annual survey by the

Confederation of Finnish Industries (EK) shows that companies have

increased their investment plans significantly. The main factors behind the

lack of investment - uncertainty about growth outlook, Russian situation and

government policies – have diminished. Finance and other resources are

available. The new government pursues a business friendly policy.

We forecast investments to fall 2% in 2015, which would mark a fourth

consecutive year that fixed investments have shrunk. The last time

investments contracted for three successive years was in the early 1990s

recession. In 2016, increasing external demand and a recovery in the

construction sector is expected to turn investments into a 3% growth.

Export expectations very high

Source: Statistics Finland, European Commission

Investments have been shrinking



Nordic Outlook

Housing market stabilising

Prices for old dwellings in Finland have been slowly declining during 2014

and the decline continued in the first quarter of 2015. In Q1 15 prices fell by -

0.2% q/q and by -1.1% y/y. High unemployment, the slowing economy and

weak purchasing power are the main factors behind the housing market

weakness. On the other hand, record low interest rates and declining margins

have been supportive. Also, the chronic lack of supply in growth centres,

especially in the Helsinki Metropolitan Area, supports the price level.

However, there are signs that the situation is stabilising. According to the

preliminary figures, house prices rose by 0.2% m/m in April. The number of

property transactions seems to be picking up after a long decline. Consumer

intentions to buy a dwelling have increased in 2015, even though the level is

still quite low. New mortgages were taken with EUR1.6bn in April, which is

the highest figure since 2012.

The debt-to-income ratio of Finnish households, although it has been slowly

increasing, is still well below that of other Nordic countries. Finnish

households are still able to amortise debt as the exceptionally low interest

rate transmits effectively in the Finnish housing market due to the high

percentage of variable rate loans.

Housing market conditions remain uncertain for 2015. The demand side is

being squeezed due to high unemployment and real wages stagnating. The

economic outlook is murky and the incentive to buy is falling as the share of

deductibility of housing loan interests in taxation is declining gradually. We

expect nominal prices to modestly decline by -1.0 % in 2015.

Despite the past price increases, we do not see excessive pricing in the

markets, risking a housing market collapse, as prices have generally risen in

line with earnings. The price-to-rent ratio is signalling a similar picture. A

major decline in house prices could be initiated only by much higher long-

term unemployment or surging interest rates, which both look unlikely

despite the lacklustre economic outlook.

Fiscal austerity and reforms ahead

The new conservative three party government led by prime minister Juha

Sipilä is reform-oriented and fiscal policy will be tightened significantly. The

government aims to adjust public finances by a total of EUR10bn with a

combination of short-term and long-term measures. An investment package

worth EUR1.6bn will soften the negative blow from frontloaded expenditure

cuts, but growth should slow down in 2016. Reforms in the production of

public services and the labour market are essential for the sustainability of

public finances and for raising the long-term growth potential. Bank of

Finland economists have recently estimated that without reforms potential

growth could get stuck close to 1% per annum.

The government also aims to achieve a ‘social contract’ with labour market

unions, in which annual working hours would be extended, locally negotiated

wage agreements encouraged and income tax rates cut. Unit labour costs

should fall by 5% at least. The aim is to improve cost competitiveness by an

internal devaluation. The government has promised a cut to income tax if an

agreement is reached. Negotiations with the unions take place this summer,

and the negotiations will not be easy. At worst, a general strike could happen.

At best, the Finnish economy regains competitiveness and potential growth

rises.

House prices in the Nordic countries



Nordic Outlook

Together with other business friendly reforms in the labour market, local

administration, production of social and health care and regulatory processes

the government could lift long-term growth. The success is contingent on

implementation, which will not be easy. Moody’s placed Finland on a

negative outlook recently and S&P has downgraded the sovereign rating to

AA+ already, but the reforms should satisfy rating agencies and Finland

continues to enjoy one of the lowest risk premiums compared to Germany.

Despite the expenditure cuts and modest recovery in the economy, the fiscal

deficit should go away slowly and debt should continue to accumulate into

the next decade. We forecast the debt ratio to reach 62% by the end of 2015.

Even if Finland was reprimanded for exceeding the deficit target in 2014 and

the debt is likely to exceed the 60% limit in 2015, it is unlikely to get into

problems with the EU Commission. Growth in debt has a background weak

grow, fiscal policy will be tightened, reforms are being planned and many

other countries have gotten away with large debts.

Long-term unemployment increasing worryingly

The seasonally adjusted unemployment rate rose to 9.6% in April. The

unemployment rate in Finland is thus lower than the eurozone average even if

the economic development in Finland has been poor. During the Finnish

depression in the early 90s the unemployment rate rose to almost 20%.

However, the official figure understates the poor labour market conditions, as

many jobseekers have become discouraged and stopped looking for a job.

This can be seen in the increasing share of the inactive population during the

last few years. Declining employment numbers, scarcity of new vacancies

and limited wage pressures indicate that the weakness is due to inadequate

demand and is not structural. What’s worrying is that the number of long-

term unemployed has increased, indicating that more and more of the

unemployed have been without a job for at least 12 months. For this segment

it is harder to find a new job and many of them will stay out of the workforce

for ever.

We forecast the average unemployment rate to be 9.2 % in 2015 and slowly

decline to 9.0% next year. As the economic and labour market conditions

improve 2016 and later, part of the population now outside of the labour

force will return to seek jobs, keeping the unemployment rate over 8% for

longer. There are already the first signs that the growth of disguised

unemployed has started to decline. The retirement wave which started in

2010 is likely to continue and the working age population should decrease

until the 2020s. This trend will put a ceiling on the number of employed

persons and dampen the growth potential markedly.

Debt level inching up in the absence of growth

% of GDP % of GDPPublic debt

Central government debt

Public deficit-8

8

24

40

56

-8

8

24

40

56

75 80 85 90 95 00 05 10


Unemployment rate rising in Finland

Source: Statistics Finland, Eurostat


Nordic Outlook

Finland: Forecast at a glance

Source: Danske Bank

National account 2013 2014 2015 2016

EUR bn (current prices)

GDP 202.0 -1.3 -0.1 0.5 1.4

Imports 79.4 -1.6 -1.4 1.0 2.5

Exports 77.6 -0.7 -0.4 2.0 4.0

Consumption 161.3 -0.2 -0.1 0.4 0.2

- Private 111.2 -0.6 -0.2 0.6 0.5

- Public 50.2 0.6 0.2 0.0 -0.5

Investments 42.7 -5.3 -5.1 -2.0 3.0


Unemployment rate, % 8.2 8.7 9.2 9.0

Earnings, % y/y 2.1 1.4 1.1 1.1

Inflation, % y/y 1.5 1.0 0.2 1.0

Housing prices, % y/y 1.6 -0.6 -1.0 1.5

Current account, EUR bn -3.6 -3.8 -2.0 -1.5

- % of GDP -1.8 -1.9 -1.0 -0.7

Public deficit, % of GDP -2.5 -3.2 -3.1 -2.7

Public debt/GDP, % of GDP 55.8 59.3 62.0 63.5


Repo rate, % p.a. 0.05 0.05 0.05 0.05

2-yr swap yield, % p.a. 0.13 0.10 0.10 0.20

10-yr swap yield, % p.a. 1.18 1.20 1.30 1.60

EUR/USD 1.12 1.04 1.06 1.10

% y/y

24/06/2015

Forecast


Nordic Outlook

Global overview Reflation theme building With inflation picking up and global growth strengthening, a reflation

theme is brewing. Even though core inflation is expected to stay

moderate, the continued decline in unemployment amid higher inflation

is set to fuel a reflation story.

We look for global growth to improve following a very weak Q1, as the

US and China recover and the euro-area economy continues with decent

growth.

In our view potential growth has come down substantially in both the

developed and emerging markets. One implication is that the output gap

will likely close faster than consensus expects as it takes less growth to

lower unemployment.

The Fed is expected to raise interest rates in September. Although the

hiking path should be moderate, we believe it will be faster than what the

market is pricing. We expect the ECB to run the QE programme until

September 2016, but believe that the market focus on exit will increase in

early 2016.

From deflation fears back to reflation

A reflation theme is building in the global economy and financial markets as

global growth is set to recover alongside a fairly sharp rise in inflation in the

second half of the year. The latter is driven by a reversal from negative to

positive energy inflation, but will nevertheless reduce deflation fears and spur

some concern that it could feed into core inflation as slack in labour markets

is also coming down.

The tightening of labour markets could happen faster than expected due to a

general trend of lower productivity growth over the past years in combination

with a more adverse development in the labour force. Unless this changes

soon, it means it takes a lot less growth to reduce unemployment than before,

as evident from both the euro area and the US in the past years. Euro

unemployment has fallen by one percentage point since April 2014 from

12.1% to 11.1% with an average GDP growth rate of just 1%. In the US the

unemployment rate has declined steadily since 2010 based on economic

growth of only 2.2%. As growth in both the US and the euro area is expected

to pick up in 2016 to 2.6% and 2.0%, respectively, we could see slack being

used up quite fast and wage pressures emerge.

In the US, wage inflation is already showing signs of a pick-up. While we

look for a gradual Fed hiking cycle, the Fed may be challenged by rising

inflation pressures forcing them to tighten faster than expected. We believe

the market is pricing a too low path of Fed hikes as it looks for only 75bp per

year in 2016 and 2017. In the euro area, wage growth is still subdued but as

2016 progresses the focus may start to turn to a gradual increase in wage

pressures. It means the ECB will probably have to end the QE programme as

planned in September 2016.

GDP outlook: Continued global recovery

Source: Bloomberg, Danske Bank Markets

Repeat of 2014 - growth to pick up in Q2 and Q3

Source: Macrobond Financial, Danske Bank Markets

Inflation to rise as energy price growth turns positiv


% y/yD anske

B ank C o nsensusD anske

B ank C o nsensus

USA 2.2 2.5 2.7 2.8

Euro area 1.4 1.5 2.0 1.7

Japan 1.0 0.9 1.4 1.5

China 6.9 7.0 6.8 6.7

Global 3.4 3.5 3.8 3.8

2015 2016


Nordic Outlook

Global growth recovers

Following a disappointing first quarter, we look for rising growth in the US

and China in coming quarters. This is very much a repeat of 2014, where a

similar pattern was evident.

Several one-off factors contributed to the slow activity in the US in Q1: the

weather was unusually cold, hitting consumption; port strikes on the West

coast took a toll on exports; and, at the same time, there seem to have been

some seasonal adjustment issues pushing GDP lower. However, there are

increasing signs that the economy is recovering now: leading indicators are

picking up, jobless claims have declined, consumption indicators point to a

rebound and housing activity has been strong going into Q2. The big drag

from energy investments is likely to stay with us for some time, though.

Looking further ahead we expect growth to continue above trend with the

economy growing 2.6% in 2016 following 2% this year. We expect

consumers to drive the recovery, supported by low rates, healthy job gains,

rising wage growth and strong wealth gains from the housing market.

In China signs are accumulating that growth will recover somewhat in

coming quarters to around 7% from 5% in Q1. It follows the stimulus from

the Chinese authorities, and housing which normally turns first is starting to

rebound. Growth is expected to moderate again in the second half, though, as

China is still in a deleveraging process and the government is focusing more

on long-term sustainability and reforms than short-term growth.

Europe was the positive news at the beginning of 2015, with data surprising

to the upside and the economy growing at the fastest pace since 2011 in the

past two quarters. The economy has been pulled by stronger consumption and

investments while exports disappointed due to the weakness in the US and

China. Looking ahead we expect the recovery to continue, but growth may

moderate slightly as consumption growth is set to slow, with the effect from

lower oil prices reversing following the bottom in oil prices from EUR40 in

January to just below EUR60 in May. Export growth is set to strengthen,

though, with the US and China recovering and the weak euro improving

competitiveness. Investments will also be supported by low rates, credit

flowing again and a moderately positive outlook.

The Japanese economy has recovered from the VAT hike last year and had

the strongest growth in Q1 among the developed regions, rising 4%

annualised. Looking ahead we expect some moderation to around 1½% in the

rest of the year and in 2016 as the post-VAT rebound will fade again.

The main risk to the outlook stems from Greece, disruptive moves in

financial markets due to declining liquidity and geopolitical risks in the

Middle East that could cause a spike in oil prices.

Productivity growth has come down during the past

10 years


Labour markets are set to get tighter over the next

year


Real money growth points to robust euro recovery



Nordic Outlook

Economic forecast

Source: OECD and Danske Bank. 1) % y/y. 2) % contribution to GDP growth. 3) % of labour force. 4) % of GDP.

Macro forecast, Scandinavia

Denmark 2014 1.1 0.6 1.4 3.7 0.3 2.6 3.8 0.6 5.1 1.8 45.2 6.32015 1.7 1.9 1.0 0.2 -0.4 3.4 1.9 0.7 4.7 -1.0 38.6 7.12016 2.1 1.9 0.3 3.2 0.1 4.9 4.6 1.7 4.4 -2.1 37.9 6.8

Sweden 2014 2.3 2.4 1.9 7.4 0.2 3.3 6.6 -0.2 7.9 -2.1 43.9 5.72015 2.3 2.0 1.6 5.3 0.1 3.8 4.9 0.2 7.8 -1.8 44.5 5.42016 2.3 2.0 1.1 3.6 0.0 5.3 5.2 1.5 7.6 -0.9 44.8 5.4

Norway 2014 2.2 2.0 2.7 0.6 0.2 2.7 1.9 2.0 3.5 - - -2015 1.5 1.9 2.3 -1.8 0.7 1.6 3.4 2.1 4.0 - - -2016 2.3 2.0 2.2 1.9 0.1 1.5 3.0 2.0 3.8 - - -

Macro forecast, Euroland

Euroland 2014 0.9 1.0 0.6 1.1 -0.1 3.7 4.0 0.4 11.6 -2.6 92.0 2.52015 1.5 1.7 1.1 2.5 0.0 3.8 4.6 0.3 11.0 -2.1 94.1 2.62016 2.0 1.1 0.7 5.5 0.0 4.2 4.1 1.5 10.2 -1.7 92.8 2.5

Germany 2014 1.6 1.2 1.1 3.4 -0.1 3.8 3.3 0.8 5.0 0.2 74.5 7.12015 2.3 2.4 1.1 3.0 0.0 5.7 5.3 0.4 5.0 0.0 72.4 7.12016 2.6 1.6 0.8 6.8 0.0 4.9 5.3 2.1 4.7 0.2 69.6 6.7

France 2014 0.4 0.6 1.9 -1.6 -0.1 2.7 3.8 0.6 10.2 -4.4 95.5 -1.92015 0.7 1.1 1.0 -0.7 0.0 4.6 4.2 0.0 10.4 -4.5 98.1 -1.92016 1.0 0.8 0.4 3.1 0.0 3.4 4.0 1.3 10.2 -4.7 99.8 -2.2

Italy 2014 -0.4 0.3 -0.9 -3.2 0.3 2.4 1.6 0.2 12.7 -3.0 132.2 1.52015 0.5 0.8 0.5 -0.7 0.0 4.3 2.6 0.0 12.6 -2.7 133.8 1.52016 1.4 0.7 0.4 3.4 0.0 4.3 3.8 1.4 12.4 -2.2 132.7 1.8

Spain 2014 1.4 2.4 0.1 3.4 -0.1 4.2 7.6 -0.2 24.5 -5.6 98.1 0.52015 2.4 2.7 -0.7 5.3 0.0 5.1 5.8 -0.7 23.2 -4.5 101.2 0.72016 2.6 1.9 0.4 6.8 0.0 4.5 4.9 1.3 21.7 -3.7 100.6 0.9

Finland 2014 -0.1 -0.2 0.2 -5.1 - -0.4 -1.4 1.0 8.7 -3.2 59.3 -1.92015 0.5 0.6 0.0 -2.0 - 2.0 1.0 0.2 9.2 -3.1 62.0 -1.02016 1.4 0.5 -0.5 3.0 - 4.0 2.5 1.0 9.0 -2.7 63.5 -0.7

Macro forecast, Global

USA 2014 2.4 2.5 -0.2 5.3 0.0 3.2 4.0 1.6 6.2 -4.1 101.0 -2.32015 2.2 3.0 0.6 3.5 0.1 2.0 5.4 0.2 5.4 -2.9 104.0 -2.52016 2.7 2.9 0.9 5.1 -0.1 4.6 4.8 2.1 5.0 -2.6 103.0 -2.6

Japan 2014 -0.1 -1.4 0.3 2.6 0.1 8.4 7.4 2.4 3.6 -7.0 245.0 0.52015 1.0 0.0 0.9 0.8 0.2 7.6 5.0 1.0 3.3 -6.5 245.0 2.22016 1.4 1.4 1.2 1.2 -0.1 6.0 7.4 1.6 3.1 -6.2 246.0 2.0

China 2014 7.4 - - - - - - 2.0 4.3 -1.1 40.7 1.82015 6.8 - - - - - - 1.7 4.2 -0.8 41.8 2.42016 6.7 - - - - - - 2.3 4.2 -0.8 42.8 2.3

UK 2014 2.8 2.5 2.1 7.8 -0.2 0.6 2.2 1.5 6.2 -5.4 88.7 -4.82015 2.8 2.5 0.7 6.1 0.0 2.4 3.9 0.3 5.5 -4.6 90.1 -4.32016 2.8 2.3 -1.0 7.5 0.0 4.7 4.7 1.6 5.3 -3.6 91.0 -3.6

Year GDP 1

Private

cons.1Public

cons.1Fixed

inv.1Stock

build.2Current

acc.4Im-

ports1

Public

debt4

Public

budget4

Ex-

ports1

Infla-

tion1

Unem-

ploym.3

Ex-

ports1

Im-

ports1

Infla-

tion1

Unem-

ploym.3Public

budget4

Current

acc.4Public

debt4

Unem-

ploym.3Public

budget4

Public

debt4Year

Year GDP 1

Private

cons.1Public

cons.1Fixed

inv.1Stock

build.2

Current

acc.4GDP 1

Private

cons.1Public

cons.1Fixed

inv.1Stock

build.2Ex-

ports1

Im-

ports1

Infla-

tion1


Nordic Outlook

Financial forecast

Source: Danske Bank

Bond and money marketsCurrency

vs USDCurrency

vs DKK

USD 24-Jun - 666.9

+3m - 716.8

+6m - 703.3+12m - 677.7

EUR 24-Jun 111.9 746.0

+3m 104.0 745.5

+6m 106.0 745.5+12m 110.0 745.5

JPY 24-Jun 124.1 5.37

+3m 125.0 5.73

+6m 126.0 5.58+12m 127.0 5.34

GBP 24-Jun 157.5 1050.1

+3m 149.0 1065.0

+6m 151.0 1065.0+12m 155.0 1050.0

CHF 24-Jun 93.4 714.1

+3m 100.0 716.8

+6m 99.1 710.0+12m 100.0 677.7

DKK 24-Jun 666.9 -

+3m 716.8 -

+6m 703.3 -+12m 677.7 -

SEK 24-Jun 823.7 81.0

+3m 894.2 80.2

+6m 867.9 81.0+12m 818.2 82.8

NOK 24-Jun 786.0 84.8

+3m 817.3 87.7

+6m 778.3 90.4+12m 740.9 91.5

Equity Markets

Regional

Price trend12 mth.

Regional recommen-dations

USA (USD) Strong USD, muted earnings growth, expensive valuation 5-8% Underweight

Emerging markets (local curr) Commodity-related equities are pressured 0-5% Underweight

Japan Reflation, earnings growth, fair valuation 5-10% Overweight

Europe (ex. Nordics) Reflation, strong earnings growth, fair valuation 10-15% OverweightNordics Earnings growth, fair valuation 5-10% Overweight

CommoditiesAverage

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016

NYMEX WTI 49 58 65 71 72 72 73 73 61 73

ICE Brent 55 64 70 76 77 77 78 78 66 78

Copper 5,808 5,750 6,000 6,250 6,400 6,550 6,700 6,850 5,952 6,625

Zinc 2,091 2,100 2,150 2,200 2,225 2,250 2,275 2,300 2,135 2,263

Nickel 14,410 14,500 15,500 16,500 17,000 17,500 18,000 18,500 15,227 17,750

Aluminium 1,813 1,800 1,875 1,950 2,000 2,050 2,100 2,150 1,860 2,075

Gold 1,219 1,209 1,199 1,189 1,179 1,179 1,179 1,179 1,204 1,179

Matif Mill Wheat (�/t) 190 190 209 208 208 206 204 202 199 205

Rapeseed (�/t) 360 360 381 361 360 356 352 340 366 352

CBOT Wheat (USd/bushel) 523 530 550 565 580 595 610 625 542 603

CBOT Corn (USd/bushel) 385 390 400 410 420 430 440 450 396 435CBOT Soybeans (USd/bushel) 990 1,000 1,000 975 1,000 1,025 1,050 1,050 991 1,031

0.28

-0.01

0.10

0.57

382

-0.25

-0.79

-

--

-0.05

-0.10

-0.05

0.62

0.871.45

-0.01

-0.01

0.20

0.15

Key int.rate

0.25

0.50

0.751.25

1.00

-0.85

0.05

0.05

0.100.10

0.50

1.00

-0.25

1.00

-0.35-0.35

0.05

0.75

10-yr swap yield

-0.21

0.05

0.050.05

3m interest rate

1.25

0.05

0.10

0.50

-0.75

0.05

-0.01

0.65

0.831.26

1.00

1.00

1.25

-0.85-0.85

-0.25

0.10

-0.20

0.20

1.30

0.15

0.150.25

-

--

-0.04

0.05

-0.30

1.652.00

1.30

1.551.95

-

-

1.30

0.00

-

1.40

0.00

1.261.29

1.25

-0.30

111.9

-

-

--

138.8

745.5

745.5745.5

921.4

879.3

815.0

930.0

825.0

920.0900.0

850.0

104.5

746.0

70.0

71.0

104.0

105.0110.0

104.0

106.0110.0

130.0

133.6139.7

Currencyvs EUR

2-yr swap yield

Risk profile3 mth.

Price trend3 mth.

2.70

2.48

2.85

0.92

0.13

0.15

1.17

-0.71

0.27

0.10

0.100.20

1.45

71.0

3.05

70.0

368

24-Jun

61

12,765

5,817

2,059

1,175

184

64

1,732

20162015

1.20

1.301.60

-

--

2.23

2.20

0.64

Medium 0-5%

985

524

1.18

1.701.95

2.34

2.30

2.40

2.302.60

0.41

-

--

2.70

1.551.85

1.45

1.61

1.60

1.50

Medium

Medium

Medium 0-8%

Medium 0-5%

0-5%

0-5%


Nordic Outlook

Disclosures This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S (‘Danske Bank’). The authors of this research report are listed on page 2.

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Each research analyst responsible for the content of this research report certifies that the views expressed in this research report accurately reflect the research analyst’s

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The research reports of Danske Bank are prepared in accordance with the Danish Society of Financial Analysts’ rules of ethics and the recommendations of the Danish

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These procedures are documented in Danske Bank’s research policies. Employees within Danske Bank’s Research Departments have been instructed that any request that

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are organised independently from and do not report to other business areas within Danske Bank.

Research analysts are remunerated in part based on the overall profitability of Danske Bank, which includes investment banking revenues, but do not receive bonuses or other

remuneration linked to specific corporate finance or debt capital transactions.

Financial models and/or methodology used in this research report

Calculations and presentations in this research report are based on standard econometric tools and methodology as well as publicly available statistics for each individual

security, issuer and/or country. Documentation can be obtained from the authors on request.

Risk warning

Major risks connected with recommendations or opinions in this research report, including a sensitivity analysis of relevant assumptions, are stated throughout the text.

Expected updates

Nordic Outlook is a quarterly forecast but new statistical data may give rise to changes in our views on individual economies.

Date of first publication

See the front page of this research report for the date of first publication.

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of, and shall under no circumstances be considered as, an offer to sell or a solicitation of an offer to purchase or sell any relevant financial instruments (i.e. financial

instruments mentioned herein or other financial instruments of any issuer mentioned herein and/or options, warrants, rights or other interests with respect to any such

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The research report has been prepared independently and solely on the basis of publicly available information that Danske Bank considers to be reliable. While reasonable

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D a n s k e B a n k , D a n s k e R e s e a r c h , H o l m e n s K a n a l 2 - 1 2 , D K - 1 0 9 2 C o p e n h a g e n K . P h o n e + 4 5 4 5 1 2 0 0 0 0 w w w. d a n s k e r e s e a r c h . co m

N o r way

C h i e f A n a l y s t & H e a d of F r a n k J u l l u m+ 4 7 8 5 4 0 6 5 4 0f j u @ d a n s k e b a n k . n o

J o s te i n T v e d t+ 4 7 2 3 1 3 9 1 8 4j t v @ d a n s k e b a n k . c o m

F i N l a N d

C h i e f A n a l y s t & H e a d of P a s i P e t te r i K u o p p a m ä k i+ 3 5 8 1 0 5 4 6 7 7 1 5p a k u @ d a n s k e b a n k . c o m

H e n n a P ä i v i k k i M i k ko n e n + 3 5 8 1 0 5 4 6 6 6 1 9h m i @ d a n s k e b a n k . c o m

i N t e r N at i o N a l M a c r o

C h i e f A n a l y s t & H e a d of A l l a n v o n M e h r e n + 4 5 4 5 1 2 8 0 5 5a l v o @ d a n s k e b a n k . d k

S i g n e P. R o e d - F r e d e r i k s e n + 4 5 4 5 1 2 8 2 2 9s r o e @ d a n s k e b a n k . d k

F l e m m i n g J e g b j æ r g N i e l s e n + 4 5 4 5 1 2 8 5 3 5f l e m m @ d a n s k e b a n k . d k

P e r n i l l e B o m h o l d t H e n n e b e r g+ 4 5 4 5 1 3 2 0 2 1p e r n i @ d a n s k e b a n k . d k

F i x e d i N c o M e r e s e a r c h

C h i e f A n a l y s t & H e a d of A r n e L o h m a n n R a s m u s s e n + 4 5 4 5 1 2 8 5 3 2a r r @ d a n s k e b a n k . d k

J e n s P e te r S ø r e n s e n+ 4 5 4 5 1 2 8 5 1 7 j e n s s r @ d a n s k e b a n k . d k

C h r i s t i n a E . Fa l c h + 4 5 4 5 1 2 7 1 5 2c h f a @ d a n s k e b a n k . d k

J a n We b e r Ø s te r g a a r d+ 4 5 4 5 1 3 0 7 8 9j a s t @ d a n s k e b a n k . d k

A n d e r s M ø l l e r L u m h o l t z+ 4 5 4 5 1 2 8 4 9 8a n d j r g @ d a n s k e b a n k . d k

H a n s R o a g e r J e n s e n+ 4 5 4 5 1 3 0 7 8 9h r o a @ d a n s k e b a n k . d k

A n d e r s Ve s te r g å r d F i s c h e r+ 4 5 4 5 1 3 6 6 4 1a f i s @ d a n s k e b a n k . d k

F x & c o M M o d i t i e s s t r at e g y

G l o b a l H e a d of F I C C R e s e a r c hT h o m a s H a r r+ 4 5 4 5 1 3 6 7 3 1th h a r @ d a n s k e b a n k . d k

C h r i s t i n K y r m e Tu x e n+ 4 5 4 5 1 3 7 8 6 7tu x @ d a n s k e b a n k . d k

M o r te n T h r a n e H e l t+ 4 5 4 5 1 2 8 5 1 8m o h e l @ d a n s k e b a n k . d k

J e n s N æ r v i g P e d e r s e n + 4 5 4 5 1 2 8 0 6 1j e n p e @ d a n s k e b a n k . d k

K r i s tof f e r K j æ r L o m h o l t+ 4 5 4 5 1 3 7 8 6 7k l o m @ d a n s k e b a n k . d k

d c M r e s e a r c h

C h i e f A n a l y s t & H e a d of T h o m a s M a r t i n H o v a r d+ 4 5 4 5 1 2 8 5 0 5 h o v a @ d a n s k e b a n k . d k

L o u i s L a n d e m a n+ 4 6 8 5 6 8 8 0 5 2 4l l a n @ d a n s k e b a n k . s e

J a ko b M a g n u s s e n + 4 5 4 5 1 2 8 5 0 3j a k j a @ d a n s k e b a n k . d k

M a d s R o s e n d a l+ 4 5 4 5 1 4 8 8 7 9m a d r o @ d a n s k e b a n k . d k

G a b r i e l B e r g i n+ 4 6 8 5 6 8 8 0 6 0 2g a b e @ d a n s k e b a n k . s e

B r i a n B ø r s t i n g+ 4 5 4 5 1 2 8 5 1 9b r b r @ d a n s k e b a n k . d k

L a r s H o l m+ 4 5 4 5 1 2 8 0 4 1l a h o @ d a n s k e b a n k . d k

B j ø r n K r i s t i a n R ø e d+ 4 7 8 5 4 0 7 0 7 2b r e d @ d a n s k e b a n k . co m

S v e r r e H o l b e k+ 4 5 4 5 1 4 8 8 8 2h o l b @ d a n s k e b a n k . d k

S ø r e n S ko v H a n s e n + 4 5 4 5 1 2 8 4 3 0s r h a @ d a n s k e b a n k . d k

N i k l a s R i p a+ 4 5 4 5 1 2 8 0 4 7n i r i @ d a n s k e b a n k . d k

O l a A a s n e s s H e l d a l+ 4 7 8 5 4 0 8 4 3 3 o l h @ d a n s k e b a n k . n o

H e n r i k R e n è A n d r e s e n + 4 5 4 5 1 3 3 3 2 7h e n a @ d a n s k e b a n k . d k

S o n d r e D a l e S to r m y r + 4 7 8 5 4 0 7 0 7 0s o s t @ d a n s k e b a n k . co m

Ø y v i n d M o s s i g e + 4 7 8 5 4 0 5 4 9 1o m s s @ d a n s k e b a n k . co m

K n u t - I v a r B a k k e n + 4 7 8 5 4 0 7 0 7 4k n b @ d a n s k e b a n k . co m

E m i l H j a l m a r s s o n+ 4 6 8 5 6 8 8 0 6 3 4e m i h @ d a n s k e b a n k . s e

L u k a s P l a t z e r+ 4 5 4 5 1 2 8 4 3 0l p l a @ d a n s k e b a n k . d k

d e N M a r k

C h i e f E c o n o m i s t & H e a d of S te e n B o c i a n+ 4 5 4 5 1 2 8 5 3 1s tb o @ d a n s k e b a n k . d k

L a s O l s e n + 4 5 4 5 1 2 8 5 3 6l a s o @ d a n s k e b a n k . d k

M i k a e l O l a i M i l h ø j+ 4 5 4 5 1 2 7 6 0 7m i l h @ d a n s k e b a n k . d k

s w e d e N

C h i e f A n a l y s t & H e a d of M i c h a e l B o s tr ö m+ 4 6 8 5 6 8 8 0 5 8 7m b o s @ d a n s k e b a n k . s e

R o g e r J o s e f s s o n+ 4 6 8 5 6 8 8 0 5 5 8 r j o s @ d a n s k e b a n k . s e

M i c h a e l G r a h n + 4 6 8 5 6 8 8 0 7 0 0m i k a @ d a n s k e b a n k . s e

C a r l M i l to n+ 4 6 8 5 6 8 8 0 5 9 8c a r m i @ d a n s k e b a n k . s e

M a r c u s S ö d e r b e r g+ 4 6 8 5 6 8 8 0 5 6 4m a r s d @ d a n s k e b a n k . s e

S te f a n M e l l i n+ 4 6 8 5 6 8 8 0 5 9 2m e l l @ d a n s k e b a n k . s e

S u s a n n e P e r n e b y+ 4 6 8 5 6 8 8 0 5 8 5s u p e @ d a n s k e b a n k . s e

e M e r g i N g M a r k e t s

V l a d i m i r M i k l a s h e v s k y + 3 5 8 ( 0 ) 1 0 5 4 6 7 5 2 2v l m i @ d a n s k e b a n k . co m

R o k a s G r a j a u s k a s+ 3 7 0 5 2 1 5 6 2 3 1r g r a @ d a n s k e b a n k . l t

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