Danish central bank critical of fiscal easing plans
As growth accelerates and inflation rises the economy risks overheating, the central bank says
The National Bank of Denmark says now is not the time for fiscal easing, as the economy grows stronger and inflation rises.
The centre-right government of prime minister Lars Løkke Rasmussen has proposed unfunded tax cuts of 1% of GDP. But the central bank believes this is the wrong move. “It is important not to ease the fiscal policy stance,” it said in a note published on October 10. Indeed, “the government should be prepared to step in and tighten fiscal policy with a view to dampening
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