Luxembourg economy seen growing faster than eurozone's
Luxembourg's economic growth will outpace the eurozone's in 2017 and the following two years, the European Commission has predicted, citing sustained employment creation, private consumption and increased domestic demand.
In its autumn economic forecast, the Commission said the Grand-Duchy's economy would expand by 3.4% this year and then by 3.5% and 3.3% in 2018 and 2019, respectively.
That compares with 2.2%, 2.1% and 1.9% among the 19 countries that use the euro currency.
"The external sector is expected to remain solid, supported by an improved external environment, especially in the euro area," the Commission said in its section on Luxembourg.
In 2019, "the external sector, which is dominated by financial services exports, is expected to remain robust, even if receding, in line with financial markets prospects".
Next year, the general government surplus is expected to decline to 0.3% of gross domestic product.
That compares with 0.5% this year, the Commission said.
"Buoyant revenue growth underpinned by strong underlying economic growth will be outpaced by growth in government expenditure, especially still-high spending for infrastructure investment," it said.
"Based on a no-policy-change assumption, the surplus of the general government balance is projected to slightly improve in 2019."
The general government sector consists mainly of central, state and local government units together with social security funds imposed and controlled by those units.
In addition, it includes non-profit institutions engaged in non-market production that are controlled and mainly financed by government units or social security funds, according to the definition on the website of the Organisation for Economic Cooperation and Development.
(Alistair Holloway, firstname.lastname@example.org, +352 49 93 739)