Statec Predicts Slower Economic Growth Ahead for Luxembourg

Luxembourg’s national statistics office, Statec, has revised its medium-term economic projections, painting a more cautious picture of the country’s recovery. While the economy is expected to gradually regain momentum, growth levels remain far below what Luxembourg has enjoyed in past decades.

After lowering its 2024 growth forecast from 1% to just 0.4%, Statec now expects GDP to rise by 1% in 2025 and reach around 2.5% by 2029 — a modest pace compared to the nearly 3% annual average recorded over the last 30 years.

The labour market outlook also reflects this slow rebound. The unemployment rate, currently at 6%, is not expected to decline significantly before 2027, with projections showing 5.1% by 2029. Employment growth will remain weak in 2025 (+1%), largely sustained by the public sector, before gradually strengthening to +1.9% by 2029 — still well below historical trends.

Inflation, meanwhile, is expected to stabilise around 2% in the medium term. After a slight rise in 2025 (+2.1%), it could drop to +1.4% in 2026, supported by a sharp fall in energy prices (around -7%). The next wage indexation is scheduled for the third quarter of 2026. Wage growth, currently high, is projected to slow to +2.3% in 2026 and +2.5% by 2029.

Statec cautioned that uncertainty remains high, particularly due to US trade tariffs and ongoing geopolitical tensions, both of which could still weigh on Luxembourg’s economic trajectory.
Read More : Luxembourg: le Statec prévoit une croissance modeste et un chômage élevé jusqu'en 2027 - L'essentiel

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