Denmark's Economic Affairs Ministry expects economic growth to slow over the next two years, according to a new forecast released on Saturday.
The ministry projects gross domestic product (GDP) growth of 2.7% in 2026, before easing to 1.6% in 2027, reflecting a weaker economic outlook and growing external uncertainties, public broadcaster DR reported.
Officials said a slowdown in growth is expected to become apparent during the current year, citing the "escalating situation in the Middle East" as a key factor behind rising energy prices and increased volatility in financial markets.
The ministry also pointed to mounting competition in the weight-loss drug market, saying it expects the pharmaceutical sector to make a smaller contribution to economic growth than in recent years.
Denmark's economy has benefited significantly from strong pharmaceutical exports, particularly driven by demand for obesity treatments.
Regional tensions have remained high since the US and Israel launched strikes against Iran in February, prompting retaliatory attacks by Tehran against Israel and US allies in the Gulf, along with the closure of the Strait of Hormuz.
A ceasefire took effect on April 8 through Pakistani mediation, but talks in Islamabad failed to produce a lasting agreement.
US President Donald Trump later extended the truce indefinitely while maintaining a blockade on vessels traveling to or from Iranian ports through the Strait of Hormuz.
The US and Iran have been negotiating proposals and counterproposals to reopen the Strait of Hormuz, as well as tackle concerns over Tehran's nuclear program and its demand for sanctions relief
