In its latest economic report, Nordea Bank says that the Danish economy is facing an historic decline.
The bank's bleak outlook for the economy - which it says is facing its biggest drop in economic activity since the oil crisis of the early 1970s - is in part as a result of a depression on various important export markets and in part as a result of the more direct effects of the credit crunch.
In particular, Nordea draws attention to a two-year drop in the housing market that has affected both construction and private consumption.
The unexpected deterioration of the credit crisis since mid-September has made the prospects for the Danish economy almost plummet, the bank says, with unemployment expected to reach just under five percent or 135,000 people during 2010.
Nordea says that the current financial crisis has already reached levels statistically only seen once a century.
At the same time, the bank says that despite a deficit in public finances it should be possible to relax economic policy if the pending downturn is unexpectedly harsh. An under-financed tax reform in 2010 may also be necessary in order to slow the increase in unemployment, the bank says.
"What is an almost catastrophic development in the financial markets has resulted in a heavy reduction in growth expectations on several of Denmark's most important export markets such as Great Britain, Sweden anmd Germany," the bank says.
Nordea does believe, however, that private consumption will grow marginally in 2009. Households will, it says, benefit from tax relief of some nine billion kroner as well as agreed pay increases of some four percent.