On 15 March 2019, Standard and Poor's (S&P) confirmed that it would maintain its AAA rating for the Grand Duchy of Luxembourg with a stable outlook.
In its analysis, the agency stresses that the prosperity of the Luxembourg economy continues to benefit from an effective institutional framework, prudent fiscal policies and robust and sustainable economic growth.
S&P underlines the government's ability to control public finances and points to the successful consolidation of public finances following the loss of VAT revenues related to e-commerce. For the period 2019-2022, S&P expects a sustainable budget surplus and an average public debt of 19% of GDP.
Overall, S&P notes that the financial sector remains a key sector of the country's economy and that the country will continue to benefit from the transfer of financial actors to Luxembourg under the "Brexit".
According to S&P, Luxembourg is well positioned to address potential risks related to the external environment, including the potential impact of changes in international corporate taxation. S&P believes that this risk will be effectively managed, as shown by the recent measures announced by the government to ensure a competitive tax environment.
Pierre Gramegna comments: "I am delighted that Standard & Poor's, like DBRS last week, has awarded the Grand Duchy the highest government rating. The AAA is an example of sound public finances and the attractiveness of our economy and its financial centre. This rating therefore underscores the validity of the government's budgetary decisions."
(Translated by the editorial team of Luxembourg.lu)