Despite a rather disappointing initial estimate of growth for 2017, the Grand Duchy's statistics portal is expecting Luxembourg's economy to fare well in 2018. Annual growth in GDP should be close to 4% this year and next year, mainly stimulated by the activity of services outside the financial sector.
The fall in unemployment is likely to continue
The trends observed in terms of employment and unemployment in the Grand Duchy remain favourable; they are in line with those of the euro area as a whole. Underemployment continues to decline. According to a number of opinion polls among businesses, this trend was maintained in early spring. Employment is therefore set to accelerate further this year, slightly faster than anticipated in previous forecasts, despite upheavals in the financial sector. A slight slowing down is expected in 2019, but that should not prevent the level of unemployment continuing to drop, from 5.9% of the active population in 2017 to 5.4% in 2019.
Rosy outlook for public finances
With the healthy resumption of growth in public revenue in 2017, most fiscal bases are doing well. It ought to be possible to maintain growth in revenue in the neighbourhood of 5% in 2018 and 2019. After having almost doubled in 2017, the growth rate for public expenditure ought to slow down, reaching a level of about 4% in 2019. On the basis of these projections for revenue and expenditure, the public balance ought to improve, exceeding 2% of GDP, compared with 1.5% each year since 2014.
(article written by the editorial team of the portal luxembourg.lu)