Pierre Gramegna, Luxembourg's Minister of Finance; Credit: SIP / Yves Kortum

Luxembourg's Minister of Finance, Pierre Gramegna, took stock of state finances on Monday during a joint meeting of the Finance and Budget Committee and the Budget Executive Control Committee of the Chamber of Deputies.

In his presentation of the general account for the year 2019, Minister Pierre Gramegna stressed that the central government posted a surplus for the second consecutive year; the budget year ended with a surplus of €60 million, while the voted budget still counted on a deficit of €650 million.

Regarding the execution of the 2020 budget on 31 August, six months after the start of the COVID-19 pandemic, the mitigation measures implemented by the government resulted in a 17.7% increase in expenditure compared to the same period in 2019. Revenues fell 9.6% over the same period. This decrease is attributable to the economic slowdown due to the implementation of containment measures to combat the spread of the pandemic and to fiscal measures to support the economy. 

Taking into account revenue and expenditure as a whole, the central government balance deteriorated by €2.5 billion compared to the year before, amounting to minus €2.9 billion at the end of August 2020.

The Finance Minister explained: “Due to the far-sighted budgetary policy of recent years, the public finances situation was once again in balance at the end of 2019. Luxembourg therefore had the financial means to tackle this crisis quickly and with determination and was able to implement a panoply of measures [...]. As the figures at 31 August 2020 show, these measures have a strong impact on the budget balance, while being essential to restore confidence and prepare for a lasting and sustainable recovery".

He concluded that the draft state budget for 2021, which will be presented today, will strengthen government efforts in the interest of the public and businesses in the context of the coronavirus crisis.