Denmark’s economy unexpectedly contracted for a second quarter, joining bail-out-reliant Portugal as the only other European nation in a recession, after consumers in the Nordic nation reduced spending, San Francisco Chronicles informs, quoting Bloomberg. Gross domestic product (GDP) shrank 0.5 percent in the first quarter, as the government also cut spending amid a widening budget deficit. GDP contracted a revised 0.2 percent at the end of 2010, Copenhagen-based Statistics Denmark said today. Economists surveyed by Bloomberg had expected growth of 0.5 percent in the first quarter. “The figures are highly surprising,” Steen Bocian, an economist at Danske Bank A/S, the largest Danish bank, said in an e-mail. “The reason for the lower consumption is a combination of higher taxes and higher inflation, driven by raw material prices.” The smallest Scandinavian economy is struggling after emerging from a recession in 2009 amid declining employment, a slump in real estate and widening deficits. Public and private consumption fell 0.8 percent in the first quarter from the previous three-month period and fixed investments dropped 8.3 percent, the agency said. Employment slid 0.1 percent, after declining 0.3 percent in the fourth quarter.