Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for the Kingdom of Denmark (long-term local- and foreign-currency issuer and senior unsecured debt ratings: AAA/Stable; short-term local- and foreign-currency issuer ratings: S-1+/Stable) on 26 January 2026.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on scoperatings.com.

Key rating factors

For the updated rating report accompanying this review, please see here.

The Kingdom of Denmark’s (Denmark) long-term AAA/Stable ratings are underpinned by the following credit strengths: i) the country’s wealthy and competitive economy; ii) sound public finances and a low level of public debt; iii) a solid external position, driven by consistent current-account surpluses; and iv) a strong institutional framework and stable governance. These factors underscore the country’s strong economic, external and fiscal shock-absorption capacity, including to geopolitical risks stemming from the current tensions with the United States over Greenland.

The Danish economy grew robustly by 3.5% in 2024, after recently revised figures showed subdued real GDP growth of 0.4% in 2022 and 0.6% in 2023. Growth in 2024 was mostly driven by declining inflation, which supported domestic demand, alongside a buoyant performance of the pharmaceutical sector. Last year, the pharmaceutical industry recorded large fluctuations in activity, with a weaker-than-expected performance in the first half of the year. Nevertheless, its contribution to annual growth remained high, estimated at approximately 1.4pps. Meanwhile, the recovery in other sectors of the economy led to a steady increase in employment and an expansion of the labour force. Low inflation and rising real wages continued to support private consumption, although heightened economic uncertainty resulted in more subdued consumer confidence.

Scope estimates real GDP to have expanded by 2.5% in 2025 and expects economic growth to slow down moderately to 2.1% in 2026 and 1.7% in 2027. Weaker global trade is set to reduce the export contribution to growth, while private consumption will remain moderate yet solid, underpinned by rising real wages and employment, albeit moderating. At the same time, the contribution of the pharmaceutical industry will remain positive, although at lower levels due to increased market competition. The reopening of the Tyra gas field and the start of raw material extraction activity will further support growth in the coming years.

Danish exports to the United States (AA-/Stable) have proven resilient to higher tariffs to date, as these have not had a significant impact on the economy as originally expected. This is partly due to the large quantity (approximately 75%) of export goods to the U.S. already produced domestically.

Denmark retains sizeable economic, external and fiscal buffers to withstand elevated geopolitical risks, including those stemming from the current tensions with the United States over Greenland. Currently, Denmark provides Greenland with modest block grants, accounting for approximately 0.1% of Danish GDP. A potential further increase in transfers to strengthen ties with the territory are unlikely to materially weigh on Denmark’s public finances. Supported by favourable economic growth and nine consecutive years of general government surpluses, public finances benefit from considerable fiscal flexibility. Denmark managed to scale up defence spending significantly last year through the establishment of the Acceleration Fund, which allocates DKK 50bn (1.7% of 2024 GDP) over 2025–26 and enabled military spending to exceed 3% of GDP. Looking ahead, Denmark retains substantial structural budgetary room — estimated to increase from DKK 7bn (0.2% of GDP) in 2027 to DKK 72bn (1.9% of GDP) in 2030 — which is sufficient to finance a permanent rise in defence spending to 3.5% of GDP within the budget from 2029.

The 2026 Finance Act significantly eases the fiscal stance. In addition to higher defence spending – estimated at 3.2% of GDP in 2025, up from 2% in 2023 – the government plans to increase expenditure in several other key priority areas. These include strengthening social welfare, investing in the green transition, increasing resources for municipalities and reducing personal taxes and duties. Scope expects the expansionary fiscal policy to result in lower budget surpluses in the coming years, at 0.9% of GDP in 2026 and 0.5% in 2027, after an estimated 2.8% of GDP in 2025. Going forward, general government surpluses will likely continue to decline gradually, turning into a slight deficit of 0.2% of GDP from 2029. Despite the fiscal loosening, Scope projects the public debt-to-GDP ratio to remain low, declining from 30.5% in 2024 to 26.1% in 2028, before increasing slightly to 26.7% by 2030. The government benefits from large net financial assets, estimated to reach approximately 26% of GDP by 2027 from 24% of GDP at the end of 2024.

The main credit challenges relate to: i) vulnerabilities in the Danish financial system, including high household debt, although partially mitigated by high levels of households’ assets; and ii) large banking sector exposure to the commercial real estate sector, which is sensitive to property prices fluctuations.

The Stable Outlook reflects Scope’s view that the risks Denmark faces over the next 12 to 18 months are well balanced.

Downside scenarios for the ratings and Outlooks are (individually or collectively):

1. Risks in the financial system increase, resulting in broader systemic risk which lead to the materialization of contingent liabilities on the government’s balance sheet; and/or
    
2. A significant and sustained deterioration in the medium-term economic and/or fiscal outlook occurs.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Sovereign Rating Methodology, 27 January 2025) is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Alessandra Poli, Analyst

© 2026 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5 D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.