(Bloomberg) -- Danish growth estimates were revised down and unemployment remained at historically low levels, according to data out Friday that provide a stark reminder to the new government about the need to increase the labor supply to avoid bottlenecks.
Gross domestic product grew at an annual rate of 1.9% in the first three months of the year, according to final estimates from Statistics Denmark, which had previously provided a preliminary estimate of 2.2%.
Gross unemployment, meanwhile, held steady at 3.7% for a sixth month in May, with the net rate edging down to 3%, from 3.1% the previous month.
A shortage of qualified labor means that Denmark's companies will miss out on about 10 billion kroner ($1.5 billion) of revenue this year, newspaper Berlingske reported on Friday, citing a PwC report. That's equal to about 0.4% of Denmark's GDP.
According to Tore Stramer, an economist at Nykredit, unemployment is at “historically low” levels once the 2007-2008 overheating period is excluded. That means the new Social Democrat government of Prime Minister Mette Frederiksen should aim to expand the labor market.
Frederiksen's center-left allies want to roll back some of the stringent immigration laws that were introduced by the previous center-right administration. Some of those policies were appropriated by the Social Democrats and helped them to success in the June 5 election at the expense of the nationalist Danish People's Party.
Read more on Denmark's new government
The government is taking over just as the economy shows signs of cooling. According to Danske Bank, GDP growth is forecast at 1.7% this year and will slow to 1.6% in 2020.
To contact the reporter on this story: Nick Rigillo in Copenhagen at nrigillo@bloomberg.net
To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Christian Wienberg
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