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Luxembourg Economy Profile 2017

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Economy - overviewThis small, stable, high-income economy has historically featured solid growth, low inflation, and low unemployment. Luxembourg, the only Grand Duchy in the world, is a landlocked country in northwestern Europe surrounded by Belgium, France, and Germany. Despite its small landmass and small population, Luxembourg is the second-wealthiest country in the world when measured on a Gross Domestic Product (GDP) per capita basis. Luxembourg has one of the highest current account surpluses as a share of GDP in the euro zone, and it maintains a healthy budgetary position and the lowest public debt level in the region.

Since 2002, the Luxembourg government has proactively implemented policies and programs to support economic diversification and to attract foreign direct investment. The government focused on key innovative industries that showed promise for supporting economic growth: logistics, information and communications technology (ICT); health technologies, including biotechnology and biomedical research; clean energy technologies;, and most recently, space technology and financial services technologies. The economy has evolved and flourished, posting a strong GDP growth rate – projected at 4.5% in 2017-2018, far outpacing the European average of 1.8%.

Luxembourg remains a financial powerhouse – the financial sector accounts for more than 35% of GDP - due to the exponential growth of the investment fund sector through the launch and development of cross-border funds (UCITS) in the 1990s. Luxembourg is the world’s second-largest investment fund asset domicile, after the United States, with $4 trillion of assets in custody in financial institutions.

Luxembourg has lost some of its advantage as a favorable tax location because of OECD and EU pressure, as well as the “LuxLeaks” scandal, which revealed advantageous tax treatments offered to foreign corporations. In 2015, the government’s compliance with EU requirements to implement automatic exchange of tax information on savings accounts - thus ending banking secrecy - has constricted banking activity. Likewise, changes to the way EU members collect taxes from e-commerce has cut Luxembourg’s sales tax revenues, requiring the government to raise additional levies and to reduce some direct social benefits as part of the tax reform package of 2017.
GDP (purchasing power parity)$58.74 billion (2016 est.)
$56.75 billion (2015 est.)
$54.13 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$60.98 billion (2016 est.)
GDP - real growth rate3.5% (2016 est.)
4.8% (2015 est.)
4.1% (2014 est.)
GDP - per capita (PPP)$102,000 (2016 est.)
$100,800 (2015 est.)
$98,400 (2014 est.)
note: data are in 2016 dollars
Gross national saving23% of GDP (2016 est.)
23.3% of GDP (2015 est.)
24.8% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 27.9%
government consumption: 16.4%
investment in fixed capital: 17.5%
investment in inventories: 0.2%
exports of goods and services: 210.3%
imports of goods and services: -172.3% (2016 est.)
GDP - composition by sectoragriculture: 0.2%
industry: 11.1%
services: 88.7% (2016 est.)
Population below poverty lineNA%
Labor force272,000
note: data exclude foreign workers; in addition to the figure for domestic labor force, about 150,000 workers commute daily from France, Belgium, and Germany (2016 est.)
Labor force - by occupationagriculture: 1.1%
industry: 20%
services: 78.9% (2013 est.)
Unemployment rate6.7% (2016 est.)
6.9% (2015 est.)
Unemployment, youth ages 15-24total: 22.6%
male: 26.1%
female: 18.1% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 3.5%
highest 10%: 23.8% (2000)
Distribution of family income - Gini index30.4 (2013 est.)
26 (2005 est.)
Budgetrevenues: $25.85 billion
expenditures: $25.52 billion (2016 est.)
Taxes and other revenues42.4% of GDP (2016 est.)
Budget surplus (+) or deficit (-)0.5% of GDP (2016 est.)
Public debt21.4% of GDP (2016 est.)
21.4% of GDP (2015 est.)
note: data cover general government debt, and includes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
Inflation rate (consumer prices)-0.1% (2016 est.)
0.1% (2015 est.)
Central bank discount rate0.25% (31 December 2016)
0.3% (31 December 2010)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area
Stock of narrow money$232.6 billion (31 December 2016 est.)
$218.4 billion (31 December 2015 est.)
note: see entry for the EU for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders
Stock of broad money$281.4 billion (31 December 2016 est.)
$271 billion (31 December 2015 est.)
Stock of domestic credit$110.5 billion (31 December 2016 est.)
$108.5 billion (31 December 2015 est.)
Market value of publicly traded shares$47.13 billion (31 December 2015 est.)
$63.17 billion (31 December 2014 est.)
$78.64 billion (31 December 2013 est.)
Agriculture - productsgrapes, barley, oats, potatoes, wheat, fruits; dairy and livestock products
Industriesbanking and financial services, construction, real estate services, iron, metals, and steel, information technology, telecommunications, cargo transportation and logistics, chemicals, engineering, tires, glass, aluminum, tourism, biotechnology
Industrial production growth rate1.7% (2016 est.)
Current Account Balance$2.854 billion (2016 est.)
$2.978 billion (2015 est.)
Exports$17.1 billion (2016 est.)
$17.81 billion (2015 est.)
Exports - commoditiesmachinery and equipment, steel products, chemicals, rubber products, glass
Exports - partnersGermany 22.1%, Belgium 16.7%, France 16.6%, UK 4.7%, Italy 4.6%, Netherlands 4% (2015)
Imports$18.33 billion (2016 est.)
$20.22 billion (2015 est.)
Imports - commoditiescommercial aircraft, minerals, chemicals, metals, foodstuffs, luxury consumer goods
Imports - partnersBelgium 27.6%, Germany 22.9%, China 11.7%, France 9.5%, US 8.4%, Netherlands 4.2%, Mexico 4.1% (2015)
Reserves of foreign exchange and gold$1 billion (31 December 2016 est.)
$771 million (31 December 2015 est.)
Debt - external$3.781 trillion (31 March 2016 est.)
$3.806 trillion (31 March 2015 est.)
Stock of direct foreign investment - at home$NA
$11.21 billion (31 December 2008 est.)
Stock of direct foreign investment - abroad$NA
Exchange rateseuros (EUR) per US dollar -
0.9214 (2016 est.)
0.885 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
0.78 (2012 est.)
Fiscal yearcalendar year

Source: CIA World Factbook
This page was last updated on July 9, 2017

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