Luxembourg Economic Forecast

Luxembourg Economic Outlook

October 23, 2018

Second-quarter growth came in at 3.1% year-on-year, easing marginally from the first quarter’s downwardly-revised 3.2% outturn (previously reported: +5.1% year-on-year) on a pullback in domestic demand. Household spending took a breather but largely held up, in line with upbeat consumer sentiment and steady labor-market gains. Meanwhile, fixed investment suffered double-digit annual losses despite tight industrial capacity and corporate-tax breaks. In a nail-biter, on 14 October voters narrowly upheld the incumbent majority. Moreover, available third-quarter proxies suggest Xavier Bettel’s three-party coalition will preside over steady growth through the remainder of the year.

Luxembourg Economic Growth

Met the why particular analysts project broad-based, albeit slower, growth next year amid solid homegrown momentum. Buoyant economic sentiment and recent tax reforms should bolster domestically-driven gains, although downside risks continue to swirl around household-debt levels and investor-capital flight. Financial-services exports will be key to growth over the medium-term. Analysts see growth at 3.4% in 2019, up 0.1 percentage points from last month’s forecast, and 3.0% in 2020.

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Luxembourg Facts

Exchange Rate1.140.65 %Nov 09
Stock Market7700.19 %Nov 09

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