The Danish government has said it plans a third successive budget surplus in 1999, pushing its domestic gross borrowing need to a 12-year low, as it seeks to prevent the economy from overheating.

It forecast the budget, together with tax rises and other measures agreed in June, will cut the nation's economic growth rate to 2 per cent next year from 2.5 per cent forecast for 1998 and the 3.5 per cent achieved in 1996 and 1997.

Analysts, though, question whether the budget was tough enough on spending to prevent the nation's balance of payments current account deficit from heading into the red.