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.

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Luxembourg Facts

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

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