OECD 2025 report: Luxembourg Among Sharpest Productivity Declines in 2023

Luxembourg recorded one of the steepest falls in labour productivity across OECD economies in 2023, according to the newly released OECD Compendium of Productivity Indicators 2025.

Productivity Performance in 2023

The report, which measures labour productivity as GDP per hour worked, shows Luxembourg posting a 2.4% decline last year. This places the country near the bottom of the OECD rankings. Only Ireland (-7.4%) and Estonia (-4.6%) experienced larger contractions.

In stark contrast, Costa Rica (+6.6%), Latvia (+3.0%), and Romania (+2.6%) emerged as the strongest performers, highlighting significant divergence in productivity growth across member countries. The OECD average stood at +0.8%, showing that overall productivity growth was positive, though unevenly distributed.

Diverging Trends Across Economies

The data underline a widening gap between economies that achieved notable productivity gains and those that fell behind. While countries such as Costa Rica and Latvia managed to improve efficiency and output per hour worked, others—Luxembourg among them—faced declines that weigh on competitiveness.

Luxembourg’s result is particularly notable given the country’s traditionally strong economic indicators. The negative performance contrasts with its reputation for high value-added sectors and positions the Grand Duchy closer to economies struggling with productivity headwinds.

Broader OECD Findings

The OECD report stresses that productivity remains a crucial driver of long-term economic growth, living standards, and competitiveness. The 2023 figures suggest that structural and cyclical factors continue to shape outcomes differently across economies, leading to sharp variations even within advanced countries.

For Luxembourg, the 2023 downturn places renewed focus on the country’s ability to sustain growth and efficiency in the face of shifting global and regional economic conditions.

📊 Full OECD report available here: Productivity in a Shifting Geopolitical and Economic Landscape oecd.org/en/publications/oecd-compendium-of-productivity-indicators-2025_b024d9e1-en/full-report/productivity-in-a-shifting-geopolitical-and-economic-landscape_7b0e7702.html
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