On Friday 8 December 2023, Luxembourg’s Ministry of Finance announced that the rating agencies Scope Ratings and Fitch Ratings confirmed, after the markets closed, the AAA credit rating of the Grand Duchy of Luxembourg with a stable outlook.
By awarding the best possible rating to Luxembourg, the two rating agencies once again certified the country's stable financial situation, thanks to solid economic fundamentals and Luxembourg's prudent budgetary management, the ministry noted.
Scope Ratings highlights the country's resilience in the face of recent health and inflation crises. Fitch Ratings pointed out that the AAA rating also reflects the robust institutional framework of the Grand Duchy.
However, the growth prospects for Luxembourg remain uncertain for 2023, with forecast divergences between the two agencies. Nevertheless, both agreed that Luxembourg maintains solid financial fundamentals and that an economic recovery can be expected from 2024.
The two agencies also warned of the financial risks linked to developments in the real estate sector, particularly for highly indebted households, following the tightening of monetary policy. In addition, Scope Ratings highlighted the risks that possible developments in the field of international taxation as well as budgetary pressures due to the ageing of the population could represent for Luxembourg in a longer-term perspective.