The credit rating agency Moody's has confirmed the maintenance of the AAA rating for the Grand Duchy with a stable outlook.
The economic resilience, solid public finances and the robust and transparent institutional framework of the Grand Duchy are the reasons why the agency has decided to give Luxembourg the best possible score. Luxembourg is one of the few countries in the world which can avail itself of this pledge of stability and confidence.
Luxembourg's AAA reflects, according to the agency, firstly, Luxembourg's economic resilience, its robust growth potential and a high degree of economic flexibility. Second, strong public finances, supported by a low debt burden, offer a great capacity to absorb exogenous shocks (as a reminder, Luxembourg is the EU country whose debt has increased the least in the context of the crisis). Third, Moody's underlines the robust and transparent institutional framework of the Grand Duchy, reflected by very strong governance indicators, prudent and predictable political decision-making as well as effective regulation and financial supervision.
The "stable outlook" rating expresses Moody's opinion that Luxembourg's credit profile will emerge from the coronavirus crisis unscathed due to a strong economic recovery and the preservation of its significant fiscal room for maneuver. In addition, Moody's expects that Luxembourg's proactive policy will continue to enable the country to successfully meet the challenges arising from evolving global and European tax regulations.
Pierre Gramegna, Minister of Finance, commented “At a time when the economic recovery is confirmed and the normalization of daily life has begun, the maintenance of the AAA is further confirmation of the validity of our policy. The rating underscores the soundness of our public finances and the effectiveness of fiscal policy. It has enabled us to get a handle on the crisis and opens up excellent prospects for us."
