The Economic Council has released its latest report, offering an in-depth look at the economic landscape for the first half of 2026. This assessment reveals three key takeaways: the economy is holding steady, the national treasury is nearing a critical deficit, and the Finance Act for this year is poised to implement essential fiscal tightening.
According to the most recent estimates provided in December, the national treasury is staring down a deficit of DKK 386 million. As a result, the council maintains its call for prudence in fiscal policy. They write, “The troubling trends emerging from public finances in 2025 highlight vulnerabilities to cyclical shifts in the treasury’s income and expenditures, underscoring the necessity for a cautious approach.”
### The Economic Overview
In the broader perspective, last year’s economy saw a modest growth of half a percent, with the council anticipating a slightly better trajectory in the coming year, projecting an increase of one percent. They note that the projected growth reflects an economic performance similar to the subdued levels witnessed during the pandemic year of 2020.
This tepid growth stems largely from the conclusion of several substantial airport construction projects and a marked decline in shrimp fishing yields. However, the fishing industry, in general, has shown some encouraging signs, helping to mitigate the downturn. Notably, both the volume and prices of cod have risen, boosting the export value of fish products over the past year. Furthermore, there has been a significant uptick in the catch of mackerel in both international and Greenlandic waters, marking the first such increase since 2019.
Looking ahead to 2026, the council notes that shrimp fishing is likely to continue its downward trend. Yet, there remains optimism that other sectors of the fishing industry can somewhat offset these losses in exports.
The tourism sector, too, is witnessing a resurgence. Enhanced connectivity from the new airports is expected to propel growth further. However, the Economic Council emphasizes a crucial need: “There’s a pressing requirement to extend the tourism season beyond the summer months and to expand the capacities of flights, hotels, and tours, so that tourism can contribute even more robustly to the national economy.”
### A Deeper Dive into the National Treasury
The state of the national treasury has considerably deteriorated, as the Economic Council candidly notes. They estimate a deficit of DKK 386 million for 2025, a situation compounded by factors that have long been of concern. Reports indicate that liquidity reserves have been dwindling alarmingly, despite the council’s persistent warnings. “Liquidity in the national treasury has seen a severe decline, reaching critically low levels nearing zero in the latter half of 2025,” the report states.
Encouragingly, there are some positive developments. The council highlights the Finance Act introduced by Naalakkersuisut for 2026, which includes vital measures aimed at restoring balance between income and expenditures. Nevertheless, the call for caution remains resonant. As KNR previously reported, the Economic Council advocates for the Inatsisartut to establish a benchmark for the minimum surplus of the national treasury—a prudent step in encouraging fiscal responsibility as the nation navigates through these challenging economic waters.