LUXEMBOURG

Strong and stable

AA1

LOW RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD71.105bn (World ranking 72, World Bank 2019)
Population 0.62mn (World ranking 167, World Bank 2019)
Form of state Constitutional Monarchy 
Head of government Xavier BETTEL (Democratic Party, Coalition) 
Next elections 2023, Legislative
  • Strong financial hub with a solid banking system and the second largest investment fund industry in the world
  • Business-friendly environment with transparent and robust institutions and modern infrastructure, facilitating easy access for FDI
  • Competitive tax regime favorable for foreign investors and the financial sector
  • Strong reputation as a sophisticated financial regulator state
  • Very low public debt and fiscal balance in surplus
  • High productivity levels and a well-educated, multilingual workforce
  • Potential vulnerabilities considering the structure of the financial system and the high dependency of the economy on the banking sector
  • Highest corporate debt stock in the Eurozone (320% of GDP)
  • Small open economy (export and import volumes are twice the size of GDP)
  • Intense dependence on cross-border workers and high cost of labor

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Germany 24%
1
27% Belgium
Belgium 14%
2
26% Germany
France 13%
3
11% France
Netherlands 5%
4
7% United States
Italy 5%
5
4% Netherlands

Trade structure by product

(% of total)

Exports Rank Imports
Iron Steel 16%
1
9% Cars And Cycles
Plastic Articles 9%
2
6% Refined Petroleum Products
Yarns Fabrics 4%
3
5% Plastic Articles
Non Ferrous Metals 4%
4
4% Iron Steel
Miscellaneous Hardware 4%
5
3% Aeronautics

Contact

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Country Risk Analyst:

Ana Boata, Laura Mesbahi

ana.boata@eulerhermes.com      

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