The Economies Of Denmark And Finland

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The onset of recessions in Scandinavia is proving no deterrent for bond and currency investors reduced to sifting between Europe’s least ugly markets. Even negative returns, driven by record capital inflows, haven’t put off buyers eager to protect their principal rather than risk losses on euro-denominated securities. “From a credit perspective, the current set-back in economic indicators in the Nordics doesn’t change the fact that the region is looking very good relative to the rest of Europe,” Thomas Clausen, chief investment officer at Alfred Berg Asset Management in Copenhagen, said in an interview. Every single mind has been trembling with a single query that “ how do I get investors ”? The arousal of the question spreads faster than the forest fire due to the market effect.

The economies of Denmark and Finland have both suffered contractions this year, while Swedish growth is stalling as exporters such as Volvo AB (VOLVB) and Ericsson AB fire thousands of workers. Norway and Sweden may be in the grip of housing bubbles, according to government ...
... agencies in the two countries. Denmark has yet to recover from a burst real estate bubble that’s triggered more than a dozen bank failures since 2008. Private-equity-scandinavia.com tried hard to sort that how do you get investors who can support at such critical conditions.

According to liberal thinkers, Scandinavian countries should have drowned in the current economic crisis with their bloated public sectors and a nanny-state mentality that stifles individual creativity. But the opposite has happened. Sweden, Denmark and Norway, where many people pay 50% of their income in taxes – with some even paying 60% – are coping better than most, in particular better than Britain. "The outlook for these countries is good," says Christian Ketels, an economist at the Harvard Business School and the Stockholm School of Economics. "They are going to return to normal quicker, and in better shape, than everybody else."

Even at a time when many of Norway's export markets are floundering, Norwegian companies continue to expand globally. Companies in Scandinavia's other economies are also pressing ahead with overseas expansion. Sweden's Ericsson, the world's largest mobile network equipment maker, is working with Mobile Communication Company of Iran to expand its network. Ericsson's growing investment in Iran comes at a time when many western companies have stopped doing business there because of international sanctions. But lacking Norway's buffer of oil reserves Sweden may still be facing tougher times ahead. We supported the whole region with millions of dollars and pound from the stock business angels. Last month, Sweden's pony-tailed finance minister Anders Borg, announced that he might have to cut the country's growth estimates following the adverse effect of Europe's debt crisis on the country's exports.

According to economists, however, Sweden has been surprisingly resilient to the global turbulence and is significantly strengthened by consumer growth.

"Household finances are generally stable. A low inflation level and pay raises jack up households' purchasing power," says Torbjorn Isaksson, an economist at Nordea.
It is expected that real disposable income in Sweden will rise by about 2 per cent a year until 2014.

Economists are also looking towards growth in consumer spending to boost Denmark's economy. Danish economists predict that the economy will expand at a rate of 0.7 per cent this year, 1.9 per cent next year and 2.1 per cent in 2014. Expecting an IT venture capital at this dilemma was a dream to be fulfilled.

Finland, however, is facing a slowdown in consumer spending growth, with economic activity decreasing across the board after the first quarter of this year.

Nevertheless, Nordea expects the Danish economy to gradually return to growth this year.

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