Luxembourg Economic Forecast

Luxembourg Economic Outlook

November 20, 2018

Analysts remain upbeat on the economy’s full-year prospects despite a weaker-than-expected first half of the year. A second-quarter pullback in domestic demand—amid household spending’s breather and another contraction in fixed investment—followed a downward revision to first-quarter growth. Available third-quarter metrics suggest more gusto, however. Consumer sentiment recovered through the quarter, while unemployment hit a near-decade low in September. Moreover, tight industrial capacity and recent corporate-tax breaks hint at improved fixed-capital outlays through the remainder of the year.

Luxembourg Economic Growth

Demand-side momentum should sustain broad-based—albeit more moderate—growth next year. Although bubbly economic sentiment and recent tax reforms are expected to bolster homegrown gains, downside risks continue to swirl around household-debt levels and investor-capital flight. Financial-services exports will be key to growth over the medium-term. FocusEconomics analysts see growth at 3.3% in 2019, down 0.1 percentage points from last month’s forecast, and 3.0% in 2020.

Luxembourg Economy Data

20132014201520162017
Population (million)0.50.60.60.60.6
GDP per capita (EUR)86,59290,89692,54492,02393,861
GDP (EUR bn)46.550.052.153.055.4
Economic Growth (GDP, annual variation in %)3.75.82.93.12.3
Consumption (annual variation in %)2.22.33.42.42.3
Investment (annual variation in %)1.24.3-8.00.51.9
Exports (G&S, annual variation in %)5.314.06.92.73.9
Imports (G&S, annual variation in %)5.114.67.12.13.9
Industrial Production (annual variation in %)-7.1-2.7-8.21.59.8
Retail Sales (annual variation in %)15.18.3-30.7-52.7-22.8
Unemployment Rate6.87.16.86.45.9
Fiscal Balance (% of GDP)1.01.31.41.61.5
Public Debt (% of GDP)23.722.722.020.823.0
Inflation Rate (HICP, annual variation in %, eop)1.5-0.90.91.61.6
Inflation Rate (HICP, annual variation in %)1.70.70.10.02.1
Inflation (PPI, annual variation in %)-2.6-1.4-5.31.44.5
Policy Interest Rate (%)0.250.050.050.00.0
Exchange Rate (vs USD)1.381.211.091.051.20
Exchange Rate (vs USD, aop)1.331.331.111.111.13
Current Account (% of GDP)5.55.25.15.15.0
Current Account Balance (EUR bn)2.52.62.62.72.8
Trade Balance (EUR billion)-7.6-6.7-6.0-5.7-6.3

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Luxembourg Facts

ValueChangeDate
Exchange Rate1.140.65 %Dec 10
Stock Market6770.19 %Dec 10

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