Investment in Luxembourg

Luxembourg Investment | Economic News & Forecasts

Luxembourg - Investment

Economy bounces back in the third quarter

The economy rebounded in the third quarter, with GDP expanding 0.5% year-on-year, contrasting the 7.8% contraction recorded in the second quarter.

The upturn reflected the easing of Covid-19 containment measures, which drove a notable improvement in domestic demand. Fixed investment bounced back in Q3, growing 7.8% on an annual basis, contrasting the previous quarter’s 20.3% decline. Moreover, household consumption fell at a less pronounced rate of 1.6% in Q3 (Q2: -19.6% yoy). Meanwhile, government expenditure growth lost pace, ticking down to 6.3% in Q3 from 6.4% in Q2.

On the external front, exports of goods and services rebounded in Q3, growing 1.2% (Q2: -1.7% yoy) as foreign demand picked up. In addition, imports of goods and services grew 2.2% in Q3, contrasting the previous quarter’s 2.9% contraction.

On a seasonally-adjusted quarter-on-quarter basis, economic activity rebounded, with GDP expanding 9.8% in Q3, contrasting the previous quarter's 7.4% fall.

After this year’s contraction due to Covid-19 containment measures, the economy is set to return to growth in 2021. Household spending should rebound amid a stabilizing labor market, while capital spending is set to bounce back. Reviving global demand should boost the external sector. A continued rise in Covid-19 cases is a downside risk, however.

FocusEconomics Consensus Forecast panelists see GDP expanding 4.6% in 2021, which is down 1.0 percentage point from last month’s forecast. For 2022, the panel projects GDP growth at 3.7%.

Luxembourg - Investment Data

2015   2016   2017   2018   2019  
Investment (annual variation in %)-7.7  4.6  5.6  -5.9  4.0  

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Luxembourg Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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