Danish Central Bank Flags Risks as Government Talks Get Underway

Denmark’s central bank warned the domestic economy could take a significant hit if the conflict in the Middle East drags on, urging caution on public spending as government negotiations get underway.

Nationalbanken cut its 2026 growth outlook to 1.8%, down from 2% forecast in September. It also flagged “significant risks” to the outlook, warning that growth could take a 0.7 percentage point hit this year in a scenario where oil and gas supplies from the Persian Gulf remain restricted.