This article first appeared on GuruFocus.
Danish GDP didn’t just rebound in the third quarterit snapped back with a force the country hasn’t seen since late 2021, and the catalyst was unmistakable. A 2.3% quarterly jump, according to Statistics Denmark, was powered almost entirely by the pharmaceutical engine dominated by Novo Nordisk (NYSE:NVO), turning an otherwise modest 0.7% non-pharma expansion into something far more eye-catching. Danske Bank’s Las Olsen framed it bluntly: Denmark right now could be viewed as an average European economy with Novo sitting on top as the growth multiplier.
That dependence cuts both ways, and investors have spent most of the year watching the Novo narrative sway national sentiment. Rising competition and the spread of copycat versions of its blockbuster weight-loss drugs previously slowed Denmark’s momentum, triggering forecast downgrades and sweeping job cuts that may leave the country facing its toughest layoff year since the pandemic. The slide in Novo’s stock has also seeped into the household psyche, with consumer confidence falling for a fifth straight month to its weakest reading since early 2023. The broader data underlines the caution: household spending barely moved at 0.1%, while exports climbed 4.1% thanks to rising pharma production and lower prices across the sector.
Yet beneath the volatility, the latest numbers offer something Danish investors haven’t had in months: evidence that the fears surrounding Novo’s drag on the economy could be overstated, at least for now. SJF Bank’s Jes Asmussen said rumors of significant damage may have been exaggerated, and the surge marks the fastest quarterly growth since the post-pandemic rebound in late 2021. With investments edging up and pharma output accelerating, Denmark’s next chapters may depend on how Novo navigates intensifying competitionbecause the country’s growth path could continue to lean heavily on its pharmaceutical heavyweight.