Luxembourg Economy set to Maintain 3% Growth Rate into 2020

Despite a deteriorating international economic context, the Luxembourg economy is set to maintain a growth rate of close to 3% in 2019 and 2020.

According to a recent Statec report, domestic support factors should allow the Luxembourg economy to maintain growth over the next two years in spite of ongoing weak global trade. Contributing to this rather pessimistic global situation has been increasing tensions between the USA and its trading partners, particularly China, since the end of 2018.

Whilst such tensions can be felt even at the European economic level, the report claims that interior demand and private consumption will help the Euro zone to maintain growth over the coming months and that growth should even slightly increase in 2020. For its part, the Luxembourg economy is predicted to maintain a growth rate close to 3%, a rate which it almost reached in 2018. Mainly non-financial services have contributed to this growth.

Nevertheless, less dynamic economic activity at the end of 2018 has meant that growth projections for the Luxembourg economy in 2019 have fallen from 3.0% (projected in Autumn 2018) to 2.7% GDP. Such growth is expected to once again rely on the performance of non-financial services (i.e. household consumption). The report thus concludes that domestic factors should help shelter the Grand Ducal economy from blows to international trade, hopefully reaching 3% growth by 2020.