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. %) | 2.9 | -0.9 | 7.2 | 1.4 | -1.1 |
GDP (EUR bn) | 62.4 | 64.5 | 72.4 | 77.5 | 79.3 |
Economic Growth (Nominal GDP, ann. var. %) | 3.8 | 3.4 | 12.1 | 7.1 | 2.3 |
Slowest GDP growth since Q4 2023 in Q3
Economy decelerates, falling short of market expectations: GDP growth slowed to 0.2% on a seasonally adjusted quarter-on-quarter basis in Q3 from 0.6% in the second quarter, marking the slowest expansion since Q4 2023. The moderation fell short of market expectations of stronger growth compared to Q2. On an annual basis, economic activity rose 1.1% in Q3, compared to the previous period's flat reading and marking the best result since Q3 2022.
Public spending and net exports drive moderation: Domestically, government spending growth was the slowest since Q1 2023, expanding 0.8% (Q2: +1.4% qoq s.a.). On the flipside, total investment growth accelerated to 2.7% in Q3, following the 0.7% expansion in Q2. Additionally, household spending growth rose to 1.7% seasonally adjusted quarter-on-quarter in Q3 (Q2: +1.4% qoq s.a.), which marked the best reading since Q4 2023. On the external front, net trade detracted from the overall reading. Exports of goods and services fell 0.1% on a seasonally adjusted quarterly basis in the third quarter, which contrasted Q2’s 1.3% expansion. Conversely, imports of goods and services growth improved to 0.7% in Q3 (Q2: +0.6% qoq s.a.).
GDP growth to strengthen in 2025: Looking ahead, GDP growth will nearly double in 2025 from 2024’s projection, spurred by stronger expansions in private spending and exports plus a recovery in fixed investment. Crucially, the ECB’s ongoing monetary policy easing cycle will buttress both domestic and EU demand. Downside risks include weaker Euro area demand and souring investor sentiment due to higher U.S. tariffs under President-elect Trump.
Panelist insight: EIU analysts said: “We expect private consumption to remain robust in the next several quarters, driving an acceleration in real GDP growth to 2.3% in 2025 from an estimated 1% in 2024 as inflation stays low. Furthermore, the affordability of mortgages and other loans should improve, as we see the European Central Bank (ECB) cutting interest rates further amid evidence of easing inflationary pressures in the euro zone.”
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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