Luxembourg: Financial resilience

Growth was well above that in other European economies in 2007. Largely unaffected by the turmoil on international markets due to its strong position in the mutual funds sector, financial services continued to be the main driver of economic growth. Strong private investment and manufacturing exports also contributed to the expansion. The improved employment prospects spread from cross-border workers to residents, enabling a gradual reduction in the unemployment rate. Despite a loss in price competitiveness, the recovery is set to weaken only moderately and growth is likely to remain above potential growth through to 2009.
For a balanced pattern of growth, labour force participation should be stimulated further, so as to increase employment growth among residents. With output growing above potential, fiscal consolidation should concentrate on further expenditure restraint.

©OECD Observer No. 264/265, December 2007-January 2008

OECD Economic Outlook No. 82, December 2007
All OECD Observer articles on Luxembourg

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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