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This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Luxembourg were reviewed by the Committee on 6 May 2019. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 22 May 2019.The Secretariat’s draft report was prepared for the Committee by Álvaro Pina, Jan Strasky, and Christina Timiliotis, under the supervision of Pierre Beynet. The Survey also benefitted from consultancy work by Guillaume Claveres. Statistical research assistance was provided by Paula Adamczyk and editorial support was provided by Poeli Bojorquez.The previous Survey of Luxembourg was issued in June 2017.
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The economy has continued to expand rapidly (Figure A). GDP grew by 2.6% in 2018, mainly underpinned by private consumption. Over most of the past decade, GDP growth in Luxembourg has strongly outpaced the euro area average. Coupled with other strengths, such as relatively low gender inequality and a healthy work-life balance, high income levels are a mainstay of Luxembourg’s well-being.
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Luxembourg is one of the most prosperous economies in the OECD. Thanks to overall sound policies and institutions, the financial sector remains competitive and has made inroads into new areas, such as fintech and green finance. Dynamic job creation has reduced unemployment and enabled Luxembourg to integrate numerous immigrants, who have become an essential pillar of the labour force while embracing the opportunity of a better life. A very large number of residents in neighbouring countries have also found work in Luxembourg, illustrating the high interconnectedness of the economy. The strong fiscal position is well illustrated by a long-standing AAA rating and the large accumulation of government financial assets.
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