Luxembourg Economic Outlook
May 31, 2022The economy likely lost steam in the opening quarter of the year amid the fallout from the war in Ukraine. Consumer sentiment soured as inflation ballooned on the back of higher energy and raw material costs. Household spending is likely to have been dented as a consequence, despite falling unemployment. Turning to Q2, consumer sentiment remained deeply pessimistic in April, while harmonized inflation rose to an all-time high. More positively, business sentiment returned to optimism in April, albeit timidly, likely supported by limited direct exposure to Russia and Ukraine. Meanwhile, the European Commission recently noted the sustainability of the public finances, the tax system, inequality in education and the green transition as key challenges going forward.
Luxembourg Economic GrowthEconomic growth will slow this year due to the war in Ukraine and a less favorable base effect. Household spending will be hit by pessimistic sentiment and higher prices due to costlier energy and food. However, growth will be supported by EU funds disbursement, a tight labor market and loose monetary and fiscal policies. FocusEconomics analysts see GDP expanding 2.5% in 2022, which is down 0.1 percentage points from last month’s forecast, and 3.0% in 2023.
Luxembourg Economy Data
5 years of Luxembourg economic forecasts for more than 30 economic indicators.
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|Exchange Rate||1.12||0.65 %||Dec 31|
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Luxembourg Economic News
September 22, 2022
Retail sales dropped 3.6% year on year in July (June: -2.7% yoy).
September 13, 2022
A flash estimate showed that economic growth moderated to 1.6% year on year in the second quarter, down from 2.7% in the first.
September 7, 2022
Harmonized inflation eased to 8.6% in August from 9.3% in July, marking the second consecutive month of a downtrend and suggesting that harmonized inflation has peaked in Luxembourg.
August 24, 2022
Retail sales nosedived 9.9% in year-on-year terms in June, which contrasted May's 0.2% increase.
August 5, 2022
Consumer prices fell 1.00% from the previous month in July, swinging from the 0.76% increase logged in June.