Denmark on Friday slashed its annual growth forecast to 1.4% from 3%, in large part due to weaker expectations for pharmaceutical giant Novo Nordisk.

Denmark has recorded strong annual growth in recent years, with its economy expanding 3.7% last year, boosted in large part by pharmaceutical exports.

Danish pharma giant Novo Nordisk makes blockbuster weight management drugs Ozempic and Wegovy.

The economy ministry noted that Denmark’s U.S. exports fell significantly in early 2025 after a huge spike in late 2024, due to both inventory build-up and increased competition in the weight loss drug market, which has seen Novo lose market share.

Generic medicines are also squeezing sales opportunities in the U.S., it said.

Europe’s pharmaceutical sector has been rocked this year by the threat of sky-high U.S. tariffs, though some certainty has now been provided by the EU-U.S. trade deal.

The Danish economy ministry said U.S. tariffs had also weighed on its growth forecast.

“Growth in the first quarter of 2025 has also been weaker than previously expected. Together with the American tariff increases and downwardly adjusted expectations for the pharmaceutical industry, this has given rise to a significant downward adjustment of the estimate for GDP growth in 2025,” it said in a statement, according to Google translate.

The ministry stressed, however, that despite the lower growth forecast, its economy remains strong overall, with high employment and inflation expected to be below 2% on an annual basis.

It meanwhile revised its growth forecast for 2026 higher, to 2.1% from 1.4%, on expectations for higher private and public consumption.

This is a breaking news story and will be updated shortly.