The Danish government aims to increase the country's national economic output by 2.25 percent per year from 2014 to 2020, it said in a new economic plan released here on Tuesday.
The plan, known as "Denmark at work: challenges for the Danish economy up till 2020" aims to create 180,000 new jobs by 2020, thereby putting the number of the country's workforce back to pre-2008 levels prior to the global financial crisis.
While the private sector is expected to be the main drive of the projected growth, public services are also anticipated to generate 0.8-percent annual growth for the same period, it added.
Meanwhile, the volume of Danish welfare payments will be reduced, with cuts in areas such as pensions and student grants that would affect up to 90,000 people by 2020.
It stressed that the country's structural account must be balanced by 2020.
"The government's central message is that it is possible to maintain and widen the welfare state, but that can only happen if more people are brought into the workforce," said Danish Prime Minister Helle Thorning-Schmidt, when presenting the plan at Christiansborg, the Danish parliament.
She stressed that Denmark had to improve competitiveness and its business environment, by investing more in research, higher education and labor force training.
Thorning-Schmidt admitted that there were challenges in cutting the public deficit, now estimated at around 13.3 billion dollars, while still improving quality of public services.
While these challenges are worsened by the ongoing EU debt crisis, she said "those countries which will emerge sensibly from the crisis, are those which are ready to make the necessary reforms."
The Danish economy shrank by 8 percent between 2008 and 2010, largely owing to the EU crisis. According to a March 2012 report by Denmark's central bank, the country's GDP is expected to grow at just 1.2 percent this year.
The new plan must be approved by a majority in the Danish parliament, which means parts of it may have to be negotiated with opposition parties.
Denmark's center-left coalition government, comprising social democrats, socialist and social liberal parties, took power following a general election in September 2011.
It has since emphasized economic growth while maintaining austerity measures and welfare reforms imposed by the previous center-right coalition government./.