Credit rating agency Standard and Poor’s (S&P) has confirmed Luxembourg's "AAA" rating with a stable outlook.
On Friday 15 March 2019, S&P confirmed that the Grand Duchy will maintain its excellent AAA credit rating. Among the key factors that justify maintaining the highest possible rating, S&P has cited, in particular, an effective institutional framework and a prudent fiscal policy as well as robust and sustainable economic growth.
S&P similarly highlighted the Luxembourg government's ability to control public finances, citing the successful consolidation of public finances following the loss of VAT revenues related to e-commerce. For the 2019-2022 period, S&P expects to maintain the budget surplus and average public debt of 19% of GDP.
In general, S&P has noted that the financial sector remains a key sector of the country's economy and that it will continue to benefit from the relocation of financial players to Luxembourg in the context of Brexit.
According to S&P, Luxembourg is also well positioned to deal with any risks related to the external environment, including the possible impact of changes in international corporate taxation. S&P thus believes that this risk will be managed effectively, as illustrated by the recent measures announced by the government to ensure a competitive tax framework.
