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Denmark Economy In Recession After Record GDP Fall In Q2

Denmark's economy shrunk at a record pace in the second quarter of 2020 to enter a technical recession, due to the disruption caused by the coronavirus, or Covid-19, pandemic, preliminary figures from Statistics Denmark showed on Friday.

Gross domestic product decreased 7.4 percent from the first quarter, when the economy contracted 2 percent. Two consecutive quarters of GDP decline qualifies as a technical recession.

This will be by far the largest decline since the compilation of the quarterly national accounts began in the early 1990s, the statistical office said.

The latest decline is much larger than the previous record fall of 2.4 percent in the fourth quarter of 2008. The GDP is now down to the level at the start of 2016, the statistical office said.

The start of the second quarter was significantly affected by the partial shutdown of society in March, after which the gradual reopening lead to generally higher production towards the end of the quarter, the statistical office added.

Employment dropped 3.1 percent in the second quarter, which was also a record fall.

The industrial sector has been severely hit by the pandemic and large negative contributions came from the services sector which includes trade, transport, hotels and restaurants, culture and leisure sub-sectors.

Agriculture, raw material extraction, finance and construction were less affected by COVID-19.

Despite the record fall, the Danish economy has fared better than most other countries in the EU who witnessed double-digit decline in national output, the statistical office said.

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