UPDATE 1-Danish consumer confidence in record long growth

Wed Jul 23, 2014 4:47am EDT

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COPENHAGEN, July 23 (Reuters) - Denmark's consumer confidence index rose in July for an unprecedented fifth consecutive month, a trend that should help bolster the Scandinavian country's tentative economic recovery, economists said on Wednesday.

The Danish economy has grown little in recent years, dragged down by the global economic crisis and a housing market collapse, which left many people wary of spending.

The index, based on surveys of consumers' opinions on current conditions and future expectations of the economy, rose to 10.6 points in July from 9.3 points in June.

It is the first time in the 40-year history of the index that consumer confidence has risen for five consecutive months. The index bottomed out at 4.2 points in February before starting its rise.

The better sentiment is down to rising disposable incomes and a recovery in the country's housing market, Danske Bank chief economist Steen Bocian said.

"There is no doubt that private consumption plays a large part in the ongoing upturn," Bocian said.

Chief economist at mortgage lender BRFkredit Mette Bjarnholt said she expected the index to continue to increase, leading to a steady rise in consumer spending in the months to come.

"That is one of the most important parameters for a self-sustaining recovery of the economy," Bjarnholt said.

The Danish government believes more exports and a pick-up in private consumption will drive the recovery this year and next. It expects the economy to grow by 1.4 percent this year and 2.0 percent in 2015. It expanded by 0.4 percent in 2013.

In the first quarter of 2014 Denmark's gross domestic product increased by 1.4 percent from the same quarter a year earlier, data showed in May. (Reporting by Teis Jensen and Sabina Zawadzki; Editing by Gareth Jones)

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