Luxembourg's financial sector optimistic about the future
Luxembourg's financial sector is looking at the future with optimism, a survey of banks and other institutions has found, believing that the Grand Duchy will recover much faster from the shock of the pandemic than many others.
A total of 80% of bankers polled expect a quicker recovery in the country than in the rest of the world, according to a survey among 350 industry people, carried out by the promotional agency Luxembourg for Finance.
Luxembourg's economy has not suffered nearly as much from the pandemic as other European countries, with the gross domestic product registering a decline of just 1.3% in 2020, according to the national statistics bureau Statec, compared to a 5% contraction in Germany and 8.3% in France.
Geopolitical uncertainty was the main concern for the outlook, cited by 70% of respondents, reflecting the growing tension between the US and China and its impacts on finance. This was followed by climate change at 60%.
Half the of respondents the poll conducted on Wednesday "believe the global financial services industry to be resilient in the medium term," an increase of 7 percentage points compared to the last poll in October 2020.
Around 20% believe that the economy in the country will grow "much faster" than in the rest of the world, compared to only 15% saying so in October.
At 54%, more than half said that the global economy will return to pre-crisis levels in 2022, while 6% said this could happen this year already.
The insurance industry was the most optimistic, with 41% saying a return to the pre-crisis level will occur in the first half of 2022. Younger fintech companies are more gloomy, with a fifth saying this will only happen after 2023.
Underscoring Luxembourg's talent gap, 44% of the respondents are "not confident at all" or "not really confident" in their ability in attracting staff.
Trade disputes and protectionism were also named among the top risks, while half of the respondents also named the possible return of high inflation.
(Additional reporting by Thomas Klein)