A view of houses in the old town of Nuuk, Greenland, March 27, 2025.
Leonhard Foeger | Reuters
Donald Trump is interested in annexing Greenland, an Arctic island offering a wealth of untapped mineral resources.
But as the U.S. president dialed up the rhetoric about America annexing the self-governing Danish territory, sparking a backlash from international leaders, a report detailed the challenges facing its economy.
Published Tuesday, a report by Søren Bjerregaard, head of securities and balance of payments at Danmarks Nationalbank, warned that there were “major challenges ahead” for Greenland’s economy.
The Arctic island’s economy — largely driven by the fishing industry — expanded by 0.8% in 2025 and is expected to grow a further 0.8% this year, down from 2% in 2022. According to the Danish central bank, the slowdown is likely to continue.
“The Greenlandic economy is slowing down, with modest growth and serious challenges for public finances,” Bjerregaard wrote.
“This is partly because the expansion of infrastructure in the form of airports is nearing completion, and planned major projects in energy supply and other areas have not yet begun.”
He added that at the same time, vital shrimp stocks were declining, while public finances “deteriorated surprisingly sharply in 2025.” Part of the pressure on public finances was arising from a decrease in dividends from government-owned firms.
“Liquidity in the Greenland Treasury fell to a critically low level in the second half of the year,” Bjerregaard said, noting that legislation set to be rolled out this year contains urgent fiscal tightening measures.
“More fiscal challenges lie ahead, with a declining and ageing population putting further pressure on the economy,” he added.
Greenland’s population, which stood at 56,699 in the final quarter of 2025, is expected to shrink 20% by 2050, as the territory struggles to attract migrants to replace emigrating residents.
Trump ‘very serious’ about acquiring Greenland
In an interview with NBC News on Monday, Trump said he was “very serious” about acquiring the Arctic island. A day earlier, he told reporters that the U.S. needs Greenland to bolster its national security.
He was speaking after Washington launched a military operation in Venezuela that led to the capture of the country’s president, Nicolas Maduro.
Trump later told The Atlantic that America “absolutely” needs Greenland, with the president telling the magazine that countries aside from Venezuela could be subject to U.S. intervention.
Trump has long floated the idea of taking Greenland. In early 2025, he said the U.S. would assume control “one way or the other.”
Officials in Greenland, Denmark and across the European continent have rejected the notion that the U.S. can make any claim on Greenland.
On Monday, Greenland’s prime minister, Jens-Frederik Nielsen, rebuked parallels between the territory and Venezuela.
“The situation is not such that the United States can simply conquer Greenland,” Nielsen told a news conference. “Our country is not really the right one to compare with Venezuela. We are a country that is democratic and has been democratic for many, many years.”