Luxembourg's economy should grow by 7% this year
Luxembourg’s economy is expected to grow by 7% this year and by 3.5% in 2022, the country’s official statistics bureau said on Thursday, as the Grand Duchy continues to weather the economic effects of the pandemic better than many of its neighbours.
“Business surveys show a level of confidence still high for Luxembourg companies [this far into the year], even if industry and construction are affected, as in the rest of the euro zone, by supply difficulties and struggle to meet demand,” Statec said in their latest economic forecast.
The statistics office said that financial services – which contributes to around a third of the Grand Duchy's GDP, according to the European Banking Federation's most recent figures – continue to benefit from a very strong stock market performance.
However, Statec warned that the ongoing pandemic – which prompted the closure of bars, restaurants and cinemas for several months when it first struck in spring 2020 – could still impact the country’s economic performance.
“The recent worsening of the health situation in Luxembourg and among our European neighbours, and consequently the prospect of restrictions on activity, is still significant and remains the main downside risk surrounding these forecasts,” Statec said.
A surge in fuel prices over the past 12 months has led Statec to revise its inflation forecast to 2.5% for both this year and next.
A rise in fuel prices caused inflation to reach 4.5% in Luxembourg in November – up from 3.6% compared with the same month last year, the country’s statistics agency said on Wednesday.
Prices of heating oil - used in boilers and water heaters - doubled in the past year while fuel costs were up 6.4% compared with October this year, Statec said.
Petrol prices rose 5.2% between October and November, diesel 2.5% and heating oil 3%. Fuel was twice as expensive per litre compared with the same period last year, Statec found.