STATEC has revealed that Luxembourg's GDP stagnated in the first quarter of the year.
This stagnation in the GDP in the Grand Duchy represents a sharp decline in the added value of the financial sector.
According to initial estimates, Luxembourg GDP in volume grew just 0.1% in the 1st quarter of 2017 (+3.3% over one year). Growth thus levelled off compared to the average pace of 1.0% per quarter over the four previous quarters. Financial activities were the main reason for this slowdown, with added value in volume down sharply (-7.3% over one quarter). This trend is mainly due to bank results, which were, however, relatively vigorous over the whole of last year. For the moment, it is difficult to ascertain if this phenomenon is part of a trend reversal or if it is a temporary downturn.
In contrast, non-financial services continued to perform well overall, with added value rising 2.2% over the quarter. The main contributors to this result were information and communication, business services and trade. Investment expenditure, which had bounced back in the 4th quarter of 2016, continued to rise (+2.3% over one quarter, +11% over one year), due mainly to acquisitions of aircraft and satellites. The latter are set to sustain business investment in 2017. The impact of the recovery in investment is, however, very limited in terms of GDP as it means that imports will also rise at more or less the same extent
In sum, while the growth figures for the 1st quarter of 2017 were disappointing, they are founded on a restricted statistical basis and should therefore be treated with caution.
