Denmark‘s economy is heading for slower growth as the pharmaceutical boom led by Novo Nordisk A/S loses steam and the industry settles into a pace more in line with the rest of the economy, the country’s financial watchdog said.

The shifting fortunes of Novo and its Danish peers are increasingly influencing the local economy, affecting the labor market, interest rates and even the country’s currency, the krone. The impact has largely been positive, with Novo’s blockbuster drugs Ozempic and Wegovy powering growth in the Nordic country of 6 million people, but the company’s recent slowdown amid intensifying competition in obesity treatments is starting to show up in national indicators.

While medicine sales will help gross domestic product grow 4.2% this year, the pace will slow to 1.8% in 2027 and to 1.3% the year after, the Economic Councils, an independent government adviser, said in its autumn report published on Tuesday.

“Indicators for the pharmaceutical industry point to more moderate production growth in the coming period,” the watchdog said. “The extraordinary contribution from the pharmaceutical industry will cease in the coming years, and its growth is instead forecast to be roughly the same level as the remaining part of private urban industries.”The success of Novo and other Danish drugmakers has also bolstered government revenue with the finance ministry repeatedly upgrading its estimate of the fiscal space available through 2035. However, the watchdog said on Tuesday that the ministry is too optimistic, estimating the surplus at 86 billion kroner ($12.9 billion), or about 18 billion kroner less than the government forecast.