On Tuesday 9 December 2025, the Luxembourg Chamber of Commerce held its year-end press conference and presented an analysis of global, European and national macroeconomics, as well as the results of the Economic Barometer for the second half of 2025.
According to the Chamber of Commerce, although the Luxembourg government has set a course to support an economic recovery, the measures often remained too timid and lacked ambition in the face of the numerous challenges stemming from the unstable and risky business climate.
In its analysis, the Chamber noted that the environment in which Luxembourgish businesses operated has changed profoundly since 2020 and successive global shocks have negatively affected companies’ profitability and competitiveness. They said that although the Luxembourg Government has set a course to support economic recovery, its measures often remain too cautious and lack ambition in the face of the multiple challenges arising from an unstable, high-risk business climate.
In this context, the Chamber of Commerce called for swift, coordinated political action to restore confidence and strengthen the country’s competitiveness. This included establishing a more pragmatic and predictable regulatory framework, controlling production costs (particularly labour costs) that weigh heavily on businesses, maintaining a sustainable budget trajectory and restoring to the productive sector the profit margins necessary to invest and innovate.
After the health crisis, supply chain saturation, the energy and inflation crises, and Russia’s invasion of Ukraine, which shifted the global geopolitical environment, 2025 was marked by the introduction of reinforced customs duties in the United States. These measures increased commercial uncertainty to levels not seen in the past fifteen years. At the same time, geopolitical tensions in Europe, the Middle East, and Asia further exacerbate this instability.
“At a time when global risks are more interconnected than ever, Luxembourg must strengthen its resilience by addressing the factors that hinder its productivity and attractiveness,” emphasised Carlo Thelen, Director General of the Chamber of Commerce. “More than ever, we need to provide our businesses with visibility and predictability, reduce labour costs and put an end to over-regulation. We must put the competitiveness of the economy and the profitability of businesses back at the heart of public policy.”
The Chamber said that the economic outlook for Europe remains weak, with growth significantly below that of the United States. While some European economies show real dynamism, a large part of the continent remains trapped in a prolonged stagnation trajectory. “For an economy as open and dependent on its trading partners as Luxembourg, this situation generates immediate and persistent risks,” noted Christel Chatelain, Director of Economic Affairs.
They highlighted that Luxembourg is experiencing an unprecedented slowdown and the growth stagnation observed since 2022 breaks with decades in which the country distinguished itself through economic dynamism. Although employment remained resilient, growth had slowed noticeably, to the point that most companies now anticipate workforce stagnation. The situation, they said, is especially concerning in sectors upstream and downstream of construction.
The overall score of the Economic Barometer for the second half of 2025 reached 51.8 out of 100, confirming the absence of recovery. Responses from 757 companies with at least six employees show that business leaders’ confidence in Luxembourg’s economic future continues to erode and has not returned to pre-2020 levels: only 67% declare themselves confident or very confident, compared with nearly 90% five years ago. Notably, businesses remain significantly more optimistic about their own prospects (72%) than about the national economy. The Chamber said this structural divergence, evident since the energy crisis, reflected an internal resilience but also awareness of the general environment’s fragility and structural weaknesses.
According to the Chamber, the Economic Barometer also showed that recent activity had been less dynamic than expected. While 18% of companies had anticipated a decline, 30% actually report a contraction over the past six months. Short-term projections also indicate little rebound: most companies expect stable activity. However, this stability remains fragile and insufficient to initiate a growth cycle. In this context, the Eurochambers Economic Survey — whose questions are integrated into the Economic Barometer — highlighted the main challenges anticipated by Luxembourgish entrepreneurs. The three principal constraints identified for 2026 are structural: labour costs, a shortage of skilled workers and the persistent regulatory burden, despite political announcements at national and European levels. These issues, particularly regarding workforce, recur year after year and follow broader European trends.
Beyond the economic cycle, companies expressed growing concern about future risks. They cited price volatility — general, energy and raw materials — commercial tensions, financial risks and cyber threats. Yet, despite this awareness, 67% have taken no specific anticipatory or management measures. The Chamber stated that this paradox reflected a climate in which uncertainty is both acknowledged and endured but difficult to integrate into operational strategies.
Moreover, the Chamber said the Economic Barometer clearly demonstrated that confidence does not restore itself and emphasised that it is rebuilt through ambitious but concrete political signals, courageous structural reforms and a strengthened competitive framework. In closing it said: “Luxembourg must regain its attractiveness to restart its economic engine in a Europe that is losing momentum.”
