Credit rating agency DBRS has confirmed Luxembourg's "AAA" rating with a stable outlook.
On Friday 8 March 2019, DBRS confirmed that the Grand Duchy will maintain its excellent AAA credit rating. Among the key factors that justify maintaining the highest possible rating, DBRS has cited, in particular, the good performance of Luxembourg's public finances, the solid institutions and the stable political environment.
DBRS similarly emphasised political continuity, guaranteed by a second coalition mandate between the DP, Green and LSAP parties ensuring a predictable and balanced fiscal policy that promotes social cohesion.
In its analysis, the agency stressed that Luxembourg public debt continues to be among the lowest in Europe and noted that over the next few years, the country will continue on a downward path to reach 18.4% of GDP in 2022. The debt will therefore remain at all times well below the 30% of GDP threshold set in the coalition agreement, or even the European benchmark of 60%.
In the context of Brexit, the agency stressed that the Luxembourg financial centre has been able to take advantage of the opportunities offered by the installation of major financial players and believes that the country will continue to benefit from this in the months to follow.
With respect to the real estate market, DBRS has seen a rise in prices since 2010, while estimating that household debt ratios remain at reasonable levels. Therefore, the agency considered that the risks to financial stability are contained. For the entire economy, the agency attested that Luxembourg is able to withstand potential financial and economic shocks.