Economic Growth in Luxembourg
The Luxembourg economy recorded an average growth rate of 2.6% in the decade to 2022, above the 1.4% average for the Euro Area. In 2022, real GDP growth was 1.4%. For more GDP information, visit our dedicated page.
Luxembourg GDP Chart
Note: This chart displays Economic Growth (GDP, annual variation in %) for Luxembourg from 2014 to 2023.
Source: Macrobond.
Luxembourg GDP Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 2.3 | -0.8 | 7.7 | 1.4 | -1.1 |
GDP (EUR bn) | 62.4 | 64.8 | 72.4 | 77.5 | 79.3 |
Economic Growth (Nominal GDP, ann. var. %) | 3.7 | 3.9 | 11.7 | 7.1 | 2.3 |
Economy records quickest expansion since Q4 2021 in the first quarter
GDP expanded 0.5% on a seasonally adjusted quarter-on-quarter basis in the first quarter, above the flat reading recorded in the fourth quarter of last year. Q1's reading marked the best result since Q4 2021. On an annual basis, GDP contracted 0.4% in Q1, from the previous quarter's 0.8% decrease. Q1's reading marked the best result since Q3 2022.
Private consumption fell 1.5% in the first quarter, which contrasted the fourth quarter's 1.1% expansion. Government consumption growth was the slowest since Q3 2023, expanding 0.1% (Q4 2023: +1.3% s.a. qoq). Meanwhile, fixed investment slid at a steeper pace of 2.8% in Q1, below the 0.1% decrease logged in the previous quarter. Exports of goods and services dropped at a milder pace of 0.7% in Q1 (Q4 2023: -1.0% s.a. qoq). Conversely, imports of goods and services slid at a steeper rate of 1.4% in Q1 (Q4 2023: -0.2% s.a. qoq).
Our panelists expect GDP growth to gradually gain steam this year as inflation abates and interest rates are cranked down by the ECB. Over 2024 as a whole, our panelists expect the economy to grow 1.5%, a rate below the average of the preceding 10 years.
Analysts at the EIU commented on the outlook: “Growth in 2024 will be driven by slowing inflation (which will strengthen household spending), loosening monetary policy from the second half and a rebound in export growth. Financial services exports are the traditional driver of growth in Luxembourg, and this sector will remain dominant in 2024. Real GDP growth will accelerate to 2.4% in 2025. […] The main risk to the economic outlook for 2024 and beyond is that, should inflation ease too slowly, the ECB may have to tighten monetary policy further than we currently expect.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Luxembourg GDP projections for the next ten years 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. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Luxembourg GDP.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Luxembourg GDP projections.
Want to get access to the full dataset of Luxembourg GDP forecasts? Send an email to info@focus-economics.com.
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