On the evening of Friday 10 November 2023, after the markets closed, the rating agency DBRS Morningstar confirmed the "AAA" rating of Luxembourg, with a stable outlook.

The agency highlighted the country's strong economic fundamentals despite a temporary economic slowdown and a moderate increase in fiscal pressures.

According to DBRS Morningstar, Luxembourg will record a contraction in GDP in 2023 but expects a recovery in 2024. The current development is driven by a drop in external demand for service exports as well as the tightening of monetary policy which has impacted national investments. Private consumption is in decline, but remains higher than that of other member states of the European Union, reportedly due to the support measures put in place by the government.

While fiscal pressures have increased due to efforts to respond to the energy crisis, the rating agency emphasised that public finances remained strong.

DBRS Morningstar also noted that, despite the anticipated moderate rise in debt in the medium term, Luxembourg maintains one of the lowest public debt levels in Europe. The "AAA" rating is also supported by the solidity of institutions, the stable political environment, as well as the prosperity of the economy and the strong external position of Luxembourg. DBRS Morningstar notably reiterated the strong attractiveness of the financial centre, thanks to its “highly qualified workforce” as well as a “solid legal and regulatory framework”.

The agency also pointed out the challenges posed by a small economy and limited diversification for the country, along with its vulnerability to external shocks and exposure to potential risks to financial stability.

Luxembourg’s Minister of Finance, Yuriko Backes, commented: “The confirmation of this excellent rating is good news. It demonstrates the solidity of our economy and the dynamism of our financial centre, despite a still tense economic context. I am particularly delighted by the fact that our country is one of the few countries in the world that can boast of this guarantee of stability and confidence.