Cityscape in Luxembourg

Luxembourg Economic Data & Projections

Luxembourg Economic Outlook

Financial powerhouse:

Luxembourg is one of the world’s wealthiest countries in terms of GDP per capita, largely due to its strong financial services sector. The country serves as a key European banking and investment hub, attracting multinational corporations, private wealth, and institutional investors with its favorable regulatory environment. The banking sector alone accounts for a significant share of GDP, while the country is also a leader in investment funds—managing over €5 trillion in assets.

Diversified economy:

While finance dominates, Luxembourg has a well-diversified economy, including strong industries in logistics, steel production, and satellite technology. The country has also positioned itself as a leader in fintech, artificial intelligence, and space technology. Its strategic location between Germany, France, and Belgium facilitates trade and investment, making it a critical logistics hub for Europe.

Challenges and high costs:

Despite its economic success, Luxembourg faces challenges such as rising housing prices, labor shortages, and growing inequality. The high cost of living, particularly in real estate, has made it difficult for workers to afford housing, while the country remains reliant on cross-border workers from neighboring nations. Additionally, while Luxembourg’s financial sector is strong, it is susceptible to global economic fluctuations and EU regulatory changes.

Luxembourg’s economic outlook:

Luxembourg’s economic growth is expected to remain strong, driven by continued expansion in financial services, innovation, and logistics. However, risks include potential EU tax policy changes that could impact its attractiveness as a financial hub and ongoing real estate affordability issues. Luxembourg’s ability to maintain its financial dominance while diversifying into new high-tech industries will be key to its future economic trajectory.

Luxembourg's Macroeconomic Analysis:

Nominal GDP of USD 85.7 billion in 2023.

GDP per capita of USD 129,725 compared to the global average of USD 10,589.

Average real GDP growth of 2.3% over the last decade.

Share of the region's population
Share of the region's GDP

Sector Analysis

In 2021, services accounted for 88% of overall GDP, manufacturing 5%, other industrial activity 7%, and agriculture 0%. Looking at GDP by expenditure, private consumption accounted for 30% of GDP in 2021, government consumption 17%, fixed investment 18%, and net exports 35%.

GDP by economic sector
GDP by type of expenditure

International trade

In 2021, manufactured products made up 82% of total merchandise exports, mineral fuels 0%, food 9%, ores and metals 5% and agricultural raw materials 1%, with other categories accounting for 3% of the total. In the same period, manufactured products made up 68% of total merchandise imports, mineral fuels 6%, food 12%, ores and metals 7% and agricultural raw materials 2%, with other goods accounting for 5% of the total. Total exports were worth USD 28 billion in 2022, while total imports were USD 27 billion.

Key exports
Key imports
Key export partners
Key import partners

Main Economic Indicators

Economic growth

The economy recorded average annual growth of 2.3% in the decade to 2023. To read more about GDP growth in Luxembourg, go to our dedicated page.

Fiscal policy

Luxembourg's fiscal surplus averaged 0.9% of GDP in the decade to 2023. Find out more on our dedicated page.

Unemployment

The unemployment rate averaged 5.9% in the decade to 2024. For more information on Luxembourg's unemployment click here.

Inflation

Inflation averaged 2.1% in the decade to 2024. Go to our Luxembourg inflation page for extra insight.

Monetary Policy

Euro Area monetary policy rate ended 2024 at 3.15%, up from 0.05% a decade earlier. See our Luxembourg monetary policy page for additional details.

Exchange Rate

From end-2014 to end-2024 the euro weakened by 20% vs the U.S. dollar. For more info on the euro, click here.

Economic situation in Luxembourg

After nearly grinding to a halt in Q3 due to decelerating public spending and weaker net exports, quarter-on-quarter GDP growth may have ended the year on a stronger note. In October–November, industrial activity improved from Q3, and retail sales continued expanding robustly. Merchandise exports also ticked up slightly from Q3 levels in the same two-month period, and economic sentiment exceeded Q3’s average in the quarter. Moreover, both domestic and EU demand should have benefited from lower average inflation and interest rates through December. Turning to Q1 2025, the economy should be benefitting from the ECB’s ongoing interest rate cuts; stronger economic sentiment in January points to improving momentum.

Luxembourg Economic Forecasts

Projections out to 2034.

41 indicators covered including both annual and quarterly frequencies.

Consensus Forecasts based on a panel of 14 expert analysts.

Want to get insight on the economic outlook for Luxembourg in the coming years? FocusEconomics collects projections out to 2034 on 41 economic indicators for Luxembourg from a panel of 14 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Luxembourg economy. To download a sample report on the Luxembourg's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.

Luxembourg Economic Indicators

2019 2020 2021 2022 2023
Unemployment (% of active population, eop) 5.4 6.3 5.2 4.9 5.5
Unemployment (% of active population, aop) 5.4 6.4 5.7 4.8 5.2
Merchandise Trade Balance (EUR bn) 1.6 1.4 0.6 -0.5 -0.5
Government Consumption (ann. var. %) 2.8 7.3 5.1 2.6 2.5
Private Consumption (ann. var. %) 2.5 -8.5 11.3 2.3 4.0
Current Account Balance (% of GDP) 8.5 9.5 11.1 6.7 6.0
Current Account Balance (EUR bn) 5.3 6.1 8.0 5.2 4.7
GDP (EUR bn) 62.4 64.5 72.4 77.5 79.3
Domestic Demand (ann. var. %) 4.9 -4.1 11.0 -1.0 2.4
Fiscal Balance (% of GDP) 2.7 -3.1 1.0 0.2 -0.7
Economic Growth (GDP, ann. var. %) 2.9 -0.9 7.2 1.4 -1.1
GDP per capita (EUR) 101,680 103,074 113,954 120,200 119,984
Exports (G&S, ann. var. %) 6.0 0.6 10.3 -0.6 -1.4
Imports (G&S, ann. var. %) 7.4 -0.4 12.4 -1.9 -0.1
Economic Growth (Nominal GDP, ann. var. %) 3.8 3.4 12.1 7.1 2.3
Inflation (HICP, ann. var. %, aop) 1.6 0.0 3.5 8.2 2.9
Inflation (HICP, ann. var. %, eop) 1.8 -0.3 5.4 6.2 3.2
Industrial Production (ann. var. %) -3.2 -10.8 8.3 -3.6 -4.2
Fixed Investment (ann. var. %) 13.5 -6.7 16.9 -7.7 -1.0
Retail Sales (ann. var. %) 7.0 0.7 -3.7 -2.8 7.5
Population (million) 0.6 0.6 0.6 0.6 0.7
Public Debt (% of GDP) 22.3 24.5 24.4 24.6 25.5
Inflation (PPI, ann. var. %, aop) -1.9 -1.9 -2.3 32.0 2.2
Foreign Direct Investment (EUR bn) 146 9 21 -342 -58
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 2.50 4.50
ECB Overnight Deposit Rate (%, eop) -0.50 -0.50 -0.50 2.00 4.00
Exchange Rate (USD per EUR, eop) 1.12 1.22 1.14 1.07 1.10
Exchange Rate (USD per EUR, aop) 1.12 1.14 1.18 1.05 1.08
3-Month EURIBOR (%, eop) -0.38 -0.55 -0.57 2.13 3.91
Free Sample Report

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