View of houses in the old town of Nuuk, Greenland, March 27, 2025.
Leonhard Fager | Reuters
President Donald Trump is interested in annexing Greenland, an Arctic island rich in untapped mineral resources.
But the report detailed the challenges facing Denmark’s economy as the US president ramped up rhetoric that the US would annex Denmark, sparking a backlash from international leaders.
A report released on Tuesday by Søren Villegaard, Head of Securities and Balance of Payments at the National Bank of Denmark, warned that “major challenges” lie ahead for Greenland’s economy.
The Arctic island’s economy, driven primarily by fishing, is expected to expand by 0.8% in 2025 and grow another 0.8% this year, down from 2% in 2022. According to Denmark’s central bank, the economic slowdown is likely to continue.
“Greenland’s economy is slowing, with moderate growth and serious fiscal challenges,” Villegarde wrote.
“One reason for this is that infrastructure expansions such as airports are nearing completion, and major planned projects in energy supply and other areas have not yet begun.”
He added that at the same time, vital shrimp stocks are in decline and public finances will “deteriorate alarmingly and rapidly in 2025.” Some of the pressure on public finances came from reduced dividends from government-owned enterprises.
“The liquidity of Greenland’s Treasury has fallen to extremely low levels in the second half of this year,” Villegarde said, noting that the bill, which is expected to come into force this year, includes emergency fiscal tightening measures.
“Further fiscal challenges lie ahead, with a declining and aging population putting further pressure on the economy,” he added.
Greenland’s population, which stood at 56,699 in the last quarter of 2025, is expected to decline by 20% by 2050 as the country struggles to attract immigrants to replace them.
President Trump is ‘very serious’ about acquiring Greenland
In an interview with NBC News on Monday, President Trump said he was thinking “very seriously” about acquiring the Arctic island. A day earlier, he told reporters that the United States needed Greenland to strengthen its national security.
He spoke after Washington launched a military operation in Venezuela that led to the capture of the country’s president, Nicolas Maduro.
President Trump later told Atlantic America that Greenland was “absolutely” necessary and told the magazine that countries other than Venezuela could be subject to U.S. intervention.
President Trump has floated the idea of occupying Greenland for years. He said the United States would take the lead “in any case” by early 2025.
Officials in Greenland, Denmark, and across continental Europe reject the idea that the United States can make any claims against Greenland.
On Monday, Greenland’s Prime Minister Jens Frederik Nielsen decried the similarities between Greenland and Venezuela.
“We are not in a situation where the United States can easily conquer Greenland,” Nielsen said at a press conference. “It’s not really appropriate to compare our country to Venezuela. We are a democratic country and have been for many years.”
