COPENHAGEN (Reuters – The Social Democratic government of Denmark reached a deal on Monday for the 2022 budget with support parties. This agreement was said to be fiscally stricter than what had been previously announced, in an effort to slow down a booming economy.

According to Nicolai Wammen, Finance Minister of Denmark, “The Danish Economy is really, really strong after corona” and that things almost move too quickly, she told reporters.

He added, “With the budget we are taking our foot off the gas pedal.”

Denmark’s economy will experience a modest boom in the coming years. The central bank of the country has asked the government for tighter fiscal policies to prevent the economy from overheating.

According to the finance ministry, this plan will reduce economic growth by 0.1% next year.

Las Olsen (chief economist at Danske Bank) stated in a note that “one could argue for greater tightening.” However, it is impossible to determine the correct dosage.

Olsen noted that unemployment has dropped sharply and, although this is an encouraging sign, the pace of decline cannot be sustained.

To tighten fiscal policies, measures included eliminating a tax deduction on home improvements and delaying public projects.

However, the deal will provide additional funds for Denmark’s healthcare sector. This sector is currently under severe pressure due to the coronavirus outbreak and a shortage of staff.

Parties also reached an agreement to increase 2 gigawatts of offshore wind power, enough to supply 2 million homes.

This is in addition the large offshore wind farm Denmark plans to build before 2030, as part of its plan to cut carbon emissions by 70% from 1990 levels.