According to recent figures published by the National Council of Public Finance ("CNPF"), Luxembourg's gross domestic product (GDP) is expected to increase from 2.0% to 3.4% this year, and reach 4.4% next year.
A consumption-oriented population
In Luxembourg, it's mainly private households that stimulate GDP growth, through consumer expenditures. For the past several months, confidence in the Eurozone has improved, just as business and household confidence which - according to Statec - are at a "historic high".
While the small increase in wages is not proportionate to that of the GDP, the reasons for this consumption revival has more to do with a return of job security. Statec notes that paid employment recorded an acceleration at the end of 2016, "reaching +3.3% over one year in the last quarter". Unemployment continues to gradually decrease, reaching the 6% threshold of the working population in April 2017.
Digitisation increases productivity
Digitisation in the workplace benefits productivity, which will significantly increase as well in the years to come. Nowadays, digitisation is a “must have” considering the numerous benefits related to its implementation. For some businesses, it even constitutes a vital component of their survival. Substantial savings in terms of costs and time are some of the numerous and obvious advantages of digitisation. Without putting an emphasis on ICTs, new industries couldn't have been developed and existing sectors couldn't have been transformed. Associated with geospatial technology, demographic evolution around the world and the development of demand of socially responsible citizens, strong arguments are in favour digitally mutating the consumerization of business and public services.
All in all, digitisation is a major player in economic growth, which, according to Statec's forecasts, will reach 3.5% or even 4% by the end of 2030. Such dynamics have a positive impact on the country's indebtedness ratio. In the fourth quarter of 2017, the indebtedness ratio stood at 23.5% of GDP and should decrease to 21.6% in 2021.
(Article written by the editorial team of the luxembourg.lu portal/Sources: Statec/Luxembourg Chamber of Commerce/CNFP)