America’s Obsession With Weight-Loss Drugs Is Affecting the Economy of Denmark

Ozempic and Wegovy are tilting the scales of Denmark’s economy.

Their Danish manufacturer, Novo Nordisk, has generated billions of dollars of revenue and supercharged the company’s market capitalisation. That has led to lower interest rates in the country, according to a bank report and economists.

The market value of Denmark’s biggest company has risen by more than a third so far this year to about $419 billion, bigger than the country’s gross domestic product of about $406 billion. The measures aren’t synonymous: market capitalisation is the value of all Novo Nordisk shares, while GDP measures goods and services produced in a year. But the comparison demonstrates how Novo Nordisk has surged past companies such as Lego and Carlsberg to sway the economy of its nordic homeland.

Take foreign-exchange management for one example.

Denmark’s currency, the krone, is pegged to the euro. Central bankers in Copenhagen adjust interest rates and make other interventions to keep its value steady with that of the continent’s common currency.

Novo Nordisk’s U.S. sales of Ozempic and Wegovy have been so strong that it has had to convert dollars into kroner in unusually large quantities, raising the krone’s value relative to the euro, said Danske Bank director Jens Naervig Pedersen.

“Because the pharmaceutical industry’s exports have grown so much, it’s creating a big influx of currency into the Danish economy,” he said.

Denmark’s central bankers have responded by keeping interest rates below the European Central Bank’s, weakening the krone, said Pedersen.

Denmark’s central bank declined to comment.

Novo Nordisk’s success with drugs used for weight loss and diabetes is overall a boon to the Danish economy, which will benefit from more jobs created by the company’s growth as it invests domestically, economists said. Lower interest rates also benefit home buyers who can secure mortgage rates somewhat lower than in the rest of Europe, they said.

“It is an embarrassment of riches—this is good for the Danish economy and they’re getting a lot of export revenues,” said Gian Maria Milesi-Ferretti, an economist and senior fellow at the Brookings Institution.

For small countries, having a domestic company play such a disproportionate role in the economy carries risks. For years, fellow Nordic nation Finland’s economy was dominated by telecom Nokia, which at its peak in 2000 accounted for 4% of the country’s GDP, more than a fifth of exports and some 70% of value on its stock exchange. It played a significant role in Finland’s growth from 1995-2007, when GDP per capita rose 55%, nearly double the increase in the U.S.

Nokia’s decline also coincided with a decade of economic stagnation in Finland after 2008. The collapse of Nokia’s handset market, largely because of competition from the iPhone that Apple introduced in 2007, exacerbated Finland’s economic woes, which under austerity policies and the eurozone crisis saw its per capita income decline over the next decade.

Novo Nordisk is now the second-most valuable public company in Europe after luxury brand LVMH Moët Hennessy Louis Vuitton.

Analysts estimate Novo Nordisk’s weight-loss drug sales to be $6.1 billion this year and to reach nearly $15 billion annually in 2027, according to data provider FactSet.

The recent budget has forced a reckoning for property investors.

Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.

And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.

“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”

Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.

The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.

These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.

The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.

For investors with existing equity, commercial property is also entering the conversation in a more serious way.

Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.

“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.

“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”

The budget has changed the settings. It has not changed the fundamentals.

America’s Obsession With Weight-Loss Drugs Is Affecting the Economy of Denmark

Novo Nordisk’s market capitalisation has matched the GDP of its home country

The federal budget has rattled property investors. But the biggest mistake isn’t the tax changes, it’s the conclusion many are drawing from them.