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Luxembourg - Economy

Whitaker's Almanack Version

Financial Outlook

Luxembourg’s finances and budget for 2014 were thrown into disarray by elections in October 2013, which meant that the budget for 2012/13 had to be extended by a maximum of four months, to April 2014, in order to allow an incoming government time to formulate its 2013/14 budget. Luxembourg’s financial and economic stability helped it to weather the aftermath of the global 2008 crisis better than most, although the economy only just managed to avoid contracting in 2013, showing growth of 0.5%. The IMF expects Luxembourg’s GDP growth for 2014 to improve to 1.3%, with inflation only marginally higher, at 1.9%, than in 2013, when it hovered around 1.8%. At those levels Luxembourg is poised to grow substantially faster than most of the Eurozone, which the IMF expects to contract by 0.6% in 2013 and to generate growth of less than 1% in 2014. The main risks to Luxembourg’s banking sector come from exposure to foreign parent banks. The IMF has warned that Luxembourg’s generous pension system is not sustainable in the medium term and requires comprehensive reform.

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Further reading on Luxembourg


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