Luxembourg's Ministry of Finance has announced that the rating agency Fitch confirmed on Friday the "AAA" credit rating for the Grand Duchy of Luxembourg, with a stable outlook.
According to the ministry, this rating, the highest possible, reflects the solidity of the country's economic fundamentals and the soundness of the fiscal policy implemented.
In an environment marked by the economic slowdown, the agency believes that the support measures (“Energiedësch and Solidaritéitspäk”) implemented by the Government have made it possible to maintain household purchasing power, which stimulates domestic demand, an important growth factor.
The tightening of financial markets could, however, impact private investment, while the energy and digital transition, accessibility to housing and infrastructure remain priorities for the Government and will continue to stimulate public investment.
The agency noted that inflationary pressures remain high despite a downward trend in underlying inflation (inflation excluding energy and unprocessed food products) recorded in recent months.
The financial sector, the mainstay of the economy, remains solid: Fitch points out that the high levels of capitalization, profitability and liquidity of the country's banks should allow them to face the consequences of a possible rate shock. of interests.
Luxembourg's prudent fiscal policy remains one of the key factors in the assessment of the rating agency, which expects the level of public debt to be kept below the threshold of 30% of GDP.
Finally, the agency emphasizes the importance of the country's political stability, the rule of law as well as the quality of regulations and solid institutions.
Finance Minister Yuriko Backes commented: “Confirmation of the highest 'AAA' rating by Fitch is excellent news. It bears witness to the solid economic fundamentals and the responsible budgetary policy of the Government, in particular with regard to the measures taken to maintain the competitiveness of businesses and the purchasing power of households. In this respect, I am delighted that the Council of State gave the green light this week to the economic tax credit. This flagship measure of Solidaritéitspak 3, which aims to offset the rise in the cost of living, could thus be voted by the Chamber of Deputies even before the start of the summer."
