Denmark's central bank lifted on Wednesday the country's economic growth expectations for 2015 and 2016 by 0.3 and 0.1 percentage points, respectively.
Growth in gross domestic product (GDP) is forecast at 2 percent in 2015 and 2.1 percent in 2016, against a December projection of 1.7 percent growth in 2015 and 2 percent in 2016.
Moreover, GDP growth for 2017 is included in the projection for the first time and is expected at 1.8 percent, Danmarks Nationalbank made the forecast in its quarterly report for the first quarter of 2015.
Danmarks Nationalbank said the country's economy has been in a recovery for some time, and "the fall in oil prices and the weakening of the effective krone rate and the very low level of interest rates have an expansionary impact on the economy."
"We have got another sign that the Danish economy is moving forward, but it is crucial to continue with reforms so that we can maintain course for Denmark, " Morten Oestergaard, Danish Minister for Economic and Interior Affairs was quoted as saying.
Denmark's consumer prices have not risen over the last year, which is primarily attributed to the pronounced fall in oil prices since the summer, the bank said.
But it noted that there is no risk of deflation as core inflation remains positive and wage growth is accelerating slightly.
Meanwhile, the central bank warned against a future housing bubble as a consequence of low interest rates.
"There is reason to keep an eye on the housing market as there is a risk that a prolonged period of very low interest rates could trigger an unhealthy development with self-reinforcing price increases for owner-occupied housing," the bank said.