Greenland Economic Council presents the current economic situation with focus on the autumn of 2020.
The report has been published and presented at an after-hours meeting on Monday at Ilisimatusarfik and was livestreamed for digital participants. Arctic Consensus participated digitally. At the presentation and in the report, it is highlighted how, since 2015, there has been a boom which has been driven by the pickup in fisheries and in the building and construction industry. This has led to increased growth and employment in Greenland. After the breakout of the corona crisis, the conditions for the economic policy changed rapidly and significantly. Even though the corona crisis has led to a rise in unemployment, the unemployment rate is still low, and there is a general need for qualified labour.
The report also touches upon how the tourism and transport industries are significantly struck and still faces a lot of vast challenges. Even though Greenland has been rapid in their response to contain the spread of corona, it is unclear when the flow of tourists will be normalised, especially after a substantial amount of countries have faced increased spread of the virus and restrictions. In this case, Greenland has not been as challenged by the impact of the corona virus as other countries.
Apart from tourism, the fishing industry has also been heavily impacted by the global economic development which has led to a price reduction. The continuous spread of corona and the economic consequences hereof, reduces the probability for a quick recovery of the activity.
Uncertainty regarding both the future development of public health and economy also influences the behaviour of citizens. Households are cautious about their consumption and businesses are careful on their investment plans. The report underlines that the support packages for the Greenlandic businesses and employees, whom have been impacted by the shutdown, have played a significant role. Even so, it has been estimated that these support packages are only apt over a short period, so that the market mechanisms are not put out of place.
A lot of elements play a role, when it comes to the future development of the Greenlandic economy. The report mentions, among other things that: “the Economic Council and the department of Finance collaborating with the Danish DREAM-group on developing a model for Greenland’s long-term economic development and public finances. It will be an important and forward-looking tool for reform, which e.g. will be able to shed light on the impact on policies in education, tax, labour market and social etc.”
You can read the full report by following this link (in Danish).
The chairmanship of the Economic Council delivers independent analysis of Greenlandic economy. The analyses act as an independent contribution in the decision-making process for the economic policy. The Economic Council’s tasks consist of conducting ongoing evaluation economic trends and on the sustainability of the acting financial policy.