The Danish government expects 1.7 percent growth in gross domestic product (GDP) in 2013 as against a previously forecast 0.9 percent, it said in its national budget proposal released here Monday.

The 2013 budget proposal will result in a deficit of 36.5 billion Danish kroner (6.1 billion U.S. dollars), up from 32.6 billion kroner (5.5 billion dollars) as estimated in May 2012.

The latest figure equals around half the expected deficit for 2012, where it is forecast at around 75 billion kroner (12.6 billion dollars).

In percentage terms, the deficit in 2013 will equal 1.9 percent of GDP, down from an expected 4 percent this year.

The Danish government said it expects growth will be positively affected by 0.3 percent in 2013 owing to the policies of the budget proposal.

Meanwhile, the government lowered GDP growth projection to 0.9 percent for 2012, against a previously announced 1.1 percent in May.

If the 2013 budget expectations are realized, Denmark's GDP growth will be higher than that of most other European Union (EU) member countries. According to the European Central Bank, the collective growth for the 17-country euro common currency zone is expected to stand between 0.5 percent and 1 percent in 2013.

That the Danish budget proposal 2013 comes in the shadow of the ongoing sovereign debt crisis in the EU is reflected in the government's tight fiscal maneuvers.

The government said there will be just 0.1 percent growth in public sector finances next year, as compared to 1.5 percent in 2012.

A previously announced plan to improve energy efficiency of buildings has been dropped, while some taxes on business have been raised.

The biggest investments are made in research and education projects, infrastructure, and schemes to reduce youth unemployment.

Danish Finance Minister Bjarne Corydon said Monday that the tight financial policy under the new budget proposal means Denmark will in 2013 meet the EU budgetary requirement that a member country's structural deficit be less than three percent of its GDP.

"We are running a responsible and trustworthy fiscal policy that meets EU recommendations and keeps Danish interest rates low to the benefit of (Denmark's) home owners, business and consumers," he said in a press statement.

Denmark, which circulates the Danish kroner currency, has escaped the worst effects of the debt crisis, although it is facing a slow down in exports, competitiveness and job creation.

The government said it expects to create 21,000 jobs in 2013, which would bring the total number of unemployed Danes to 158,000 persons.

Xinhua