DENMARK SEPTEMBER ECONOMIC HIGHLIGHTS

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SUBJECT: DENMARK SEPTEMBER ECONOMIC HIGHLIGHTS

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CONTENTS
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ECON: Denmark GDP Down Sharply in Q2
ECON: Productivity Concerns Persist
EFIN: Interest Rate Spread Back to Pre-Crisis Levels
EWWT: Maersk Confident Despite Financial Crisis
ENRG: GE Wind Looking to Expand in Northern Europe

Denmark GDP Down Sharply in Q2
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1. Danish GDP contracted by 2.6% in the second quarter of 2009, due
primarily to massive declines in investment of 10.3% and net trade,
with imports down 3.9% and exports down 4.5%. Private consumption
also showed a minor decline of 0.3%. Government consumption was up
by 0.5%, but was insufficient to counter the combined downturn in
other GDP components. Compared to the same period in 2008, 2009 Q2
GDP was down by 7.2%. GDP contracted by 5.3% in the first half of
2009 compared to the first half of 2008. The new figures have
shocked local analysts, who have revised downward their expectations
for the Danish economy and are now projecting a total contraction
for 2009 GDP of 4.5% - 5% (previous projections were 3.5% - 4%).
Retail sales were down in August by 1.2% compared to July, and down
4.6% compared to August 2008. The value of transactions using the
Dankort, the cash card used as a primary means of payment and often
taken as an indicator for trends in private consumption, was 6.3%
less in August than in July, making for a grim month for the
hoped-for consumer driven recovery. Extrapolating from the OECD's
most recent July statistics, we estimate the current unemployment
rate basically unchanged at around 6.4%.

Productivity Concerns Persist
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2. According to an OECD report, Denmark is expected to have the
fourth slowest GDP growth among OECD countries between 2008 and
2017, primarily due to lagging productivity growth. The Danish
government released a discussion paper estimating Denmark will lose
DKK 20 billion (USD 3.95 billion and over 1% of GDP) annually in
potential GDP growth due to lower than projected productivity
growth. As a response, the government has launched the Growth
Forum, comprising CEOs from Denmark's biggest companies, ministers,
scientists, labor market representatives and economists, to find
solutions to improve productivity growth. With current GDP figures
worse than expected and private consumption not showing signs of a
pickup, Danish businesses and the opposition are increasing their
calls for additional stimuli in next year's public budget. However,
the government remains reluctant to launch additional stimulus
initiatives at this point.

Interest Rate Spread Back to Pre-Crisis Levels
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3. The Danish National Bank lowered its leading lending rate,
effective September 25, to 1.25%, thereby returning to the
pre-crisis spread of 0.25% to the ECB lending rate. The spread rose
to 1.75% in defense of the Kroner last autumn. On September 29 the
main deposit rates were lowered as well -- the Current Account rate
to 0.9% from 1.0% and the certificates of deposit rate to 1.0% from
1.15%. Local commentators believe the Bank will not lower the
lending rate any further unless the ECB moves first, which would be
unexpected.

Maersk Confident Despite Financial Crisis
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4. Maersk Line presented 2009 first half losses big enough to pull
the entire Maersk Group into the red, the first time that has
happened in their 105 year history. However, Maersk Group CEO Nils
Smedegaard Andersen is attempting to project confidence and claiming
the firm has the situation under control. Maersk Line underwent
massive restructuring over the last couple of years, starting prior
to the crisis, and the cost cutting and efficiency improvements are
now paying off. Prior to the crisis, Maersk Line was earning USD
200 less per container than its competitors, but with the
restructuring they are now making USD 100 more. Andersen projects
the freight market will be in imbalance for the next couple of
years, but that Maersk Group will come through the crisis
strengthened as it is already gaining market share on its supply
services and terminal businesses.

GE Wind Looking to Expand in Northern Europe
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5. With the shutting down of ship building at the Lindo shipyard,
it appears the facility is likely to become a center for off-shore
wind turbines. GE Wind and Siemens Wind Power are both reported to
be interested in establishing separate operations for production and
shipping of off-shore wind turbines for the Northern European market
at the former shipyard. American GE Wind recently entered the
off-shore market by purchasing a small Norwegian producer. They

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have expressed that they want their share of the European market and
intend to build facilities on the European continent.

FULTON