LUXEMBOURG

Dependency on financial services and Brexit allowed for higher resilience against the Covid-19 shock

AA1

LOW RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • 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
  • Substantial room for improvement regarding access to post-secondary education

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Germany 24%
1
33% Belgium
France 16%
2
23% Germany
Belgium 11%
3
11% France
Netherlands 5%
4
7% China
Italy 5%
5
6% Netherlands

Trade structure by product

(% of total)

Exports Rank Imports
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television ... 14%
1
15% Vehicles other than railway or tramway rolling stock, and parts and accessories thereof
Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 13%
2
12% Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television ...
Iron and steel 11%
3
10% Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral ...
Plastics and articles thereof 9%
4
9% Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof
Vehicles other than railway or tramway rolling stock, and parts and accessories thereof 8%
5
5% Plastics and articles thereof
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