Luxembourg PESTLE Insights – A Macroeconomic Outlook Report

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Financial intermediation, real estate, and business activities contributed 47.1% to the gross value added (GVA) in 2023, followed by transport, storage and communication (11.6%) and wholesale, retail, and hotel activities (10.1%). In nominal terms, the three sectors are expected to grow by 5.1%, 5.6%, and 5.5%, respectively, in 2024.

According to the Central Bank of Luxembourg, Luxembourg’s direct investment position was at $994.9 billion in Q4 2023, compared to the investment of $969.2 billion in Q4 2022. The country had portfolio disinvestment of $1.3 trillion in Q4 2023, compared to the portfolio disinvestment of $1.2 trillion in Q4 2022.

Scope

Luxembourg to spend about $352 million on rail expansion. The extension of Luxembourg City's central railway station includes the construction of four tracks and two additional rail platforms. The project is expected to complete by 2030.

Key Highlights

The LUXXX index exhibited a volatile trend over past year. As of May 1, 2024, the index stood at 1,378.8, compared to 1,550.5 on May 01, 2023.

Reasons to Buy

Macroeconomic Outlook Report identifies the potentials of the country as an investment destination by analyzing the political, economic, social, technological, legal and environmental (PESTLE) structure.

PESTLE Insights provides 360 degree view of the economy which can be used as a strategic tool to understand the market dynamics, business potentials and direction of operations

Along with providing the country’s snapshot, the report captures the risk factors pertaining to the macroeconomic risks, political environment, legal environment, demographic and social structure effectiveness, technology & infrastructure and natural and geographic aspects that might impact business.

This report also highlights key clusters/cities which contribute significantly to the country GDP and population along with major companies’ presence in these areas.

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Table of Contents

Table of Contents

List of Exhibits

Did You Know?

Country Highlights

Key Economic Updates

Country Snapshot

Political Landscape

Economic Landscape

Social Landscape

Technological Landscape

Legal Landscape

Environmental Landscape

Outlook

Table

Exhibit 1: Luxembourg’s performance in terms of its country risk analysis in comparison to the West Europe and the world averages

Exhibit 2: Performance overview (score: 0-100)

Exhibit 3: Broad categories and weights behind the index

Exhibit 4: LUXXX index, (May 2023 – May 2024)

Exhibit 5: Key sectors contribution to the economy (2019–26f)

Exhibit 6: Net International investment position by type (Q1 2022 to Q4 2023)

Exhibit 7: Inward direct investment position – geographical breakdown by country (2018–22)

Exhibit 8: Key infrastructure indicators

Exhibit 9: Real GDP and household consumption growth rate (2019–26f)

Exhibit 10: Real GDP growth rate comparison (2023)

Exhibit 11: Volume of exports and imports growth (2019–26f)

Exhibit 12: Current account balance (2019–26f)

Exhibit 13: Top three commodity exports, % of total exports (2019–23)

Exhibit 14: Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof exports, % of world total (2022)

Exhibit 15: Interest rates (April 2019 – April 2024)

Exhibit 16: Exchange rate and inflation (2019–26f)

Exhibit 17: Public finance (2019–26f)

Exhibit 18: General government debt (2019–26f)

Exhibit 19: Unemployment rate (2019–26f)

Exhibit 20: Average annual wages (2019–26f)

Exhibit 21: Labor cost index (2019–26f)

Exhibit 22: Rural/urban share of total population (1995, 2005, 2015, 2025f)

Exhibit 23: Age-group share of total population (1995, 2005, 2015, 2025f)

Exhibit 24: Gender split (1995, 2005, 2015, 2025f)

Exhibit 25: Internet users as a percentage of total population, mobile penetration rate and broadband penetration rate (2023)

Exhibit 26: Number of patents granted per million population (2022)

Exhibit 27: High technology exports, % of manufactured exports (2022)

Exhibit 28: Rule of law index (rankings) 2023

Exhibit 29: Corruption perceptions index (rankings) (2023)

Exhibit 30: Renewable energy, installed capacity (2019–23)

Exhibit 31: CO2 emissions (2018–22)

Figures

List of Figures

Exhibit 1: Luxembourg’s performance in terms of its country risk analysis in comparison to West Europe and the World

Exhibit 2: Performance overview (score: 1-100)

Exhibit 3: Broad categories and weights behind the index

Exhibit 4: Luxembourg stock index (February 2020 – February 2022)

Exhibit 5: Key sectors; contribution to the economy (2017-2024f)

Exhibit 6: Net international investment position (Q1 2020 – Q3 2021) and by type (Q1 2020 – Q3 2021)

Exhibit 7: Cross border mergers & acquisitions (2017-2020) and announced greenfield investments (2017-2020)

Exhibit 8: Key infrastructure indicators

Exhibit 9: Real GDP and household consumption growth rate (2017-2024f)

Exhibit 10: Real GDP growth rate comparison (2021e)

Exhibit 11: Exports, imports and trade balance (2017-2024f)

Exhibit 12: Current account balance (2017-2024f)

Exhibit 13: Top three commodity exports, % of total exports, (2016-2020)

Exhibit 14: Iron and steel, % share of world’s total (2020)

Exhibit 15: Interest rates (February 2017 – February 2022)

Exhibit 16: Exchange rate (2017-2024f)

Exhibit 17: General government net lending/borrowing (2017-2024f)

Exhibit 18: General government gross debt (2017-2024f)

Exhibit 19: Unemployment rate (2017-2024f)

Exhibit 20: Average annual wages (2017-2021e)

Exhibit 21: Labor cost index (2017-2024f)

Exhibit 22: Rural/urban share of total population (2005, 2015, 2025)

Exhibit 23: Age-group share of total population (2005, 2015, 2025)

Exhibit 24: Gender split (2005, 2015, 2025)

Exhibit 25: Internet users as a % of the total population, mobile and broadband penetration rates (2021e)

Exhibit 26: Number of patents granted per million people (2020)

Exhibit 27: High technology exports (% of manufactured exports) (2020)

Exhibit 28: Doing business in Luxembourg, 2020

Exhibit 29: Corruption perceptions index rankings, 2021

Exhibit 30: Renewable energy, installed capacity (2016-2020)

Exhibit 31: CO2 emissions (2016-2020)

Frequently asked questions

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