The economy of Luxembourg is largely dependent on the banking, steel, and industrial sectors. Luxembourgers enjoy the second highest per capita gross domestic product in the world (CIA 2007 est.), behind Qatar. Luxembourg is seen as a diversified industrialized nation, contrasting the oil boom in Qatar, the major monetary source of the southwest Asian state.
Although Luxembourg in tourist literature is aptly called the "Green Heart of Europe", its pastoral land coexists with a highly industrialized and export-intensive area. Luxembourg's economy is quite similar to Germany's. Luxembourg enjoys a degree of economic prosperity very rare among industrialized democracies.
In 2009, a budget deficit of 5% resulted from government measures to stimulate the economy, especially the banking sector, as a result of the world economic crisis. This was however reduced to 1.4% in 2010.
For 2017 the (expected) figures are as follows: Growth 4.6%; Inflation 1.0%; Budget deficit 1.7%, to be reduced to 0.8% in 2020; Debt: 20.4%, no new debts to be taken in the fiscal year.
|Economy of Luxembourg|
|Currency||1 Euro (€1) = 100 eurocent = $1,14|
|EU, WTO and OECD|
|GDP||€55.1/$60.7 billion (nominal, 2018 est.)|
|GDP rank||103rd (PPP, 2012 est.)|
|3.1% (Real, 2015 est.)|
GDP per capita
|€91,600/$102,000 (nominal, 2015 est.)|
GDP by sector
|agriculture: 0.4%; industry: 13.6%; services: 86% (2007 est.)|
|0.3% (CPI, 2015 est.)|
Population below poverty line
|500,000 of who 154,900 are foreign cross-border workers commuting primarily from France, Belgium, and Germany (2011)|
Labour force by occupation
|agriculture: 2.2%; industry: 17.2%; services: 80.6% (2007 est.)|
|Unemployment||6.0% (2012 est.)|
Average gross salary
|€51,000 ($66,000), yearly (2011)|
|€38,000 ($50,000), yearly (2011)|
|banking and financial services, iron and steel, information technology, telecommunications, cargo transportation, food processing, chemicals, metal products, engineering, tires, glass, aluminium, tourism|
|Exports||$14.7 billion (2014 est.)|
|machinery and equipment, steel products, chemicals, rubber products, glass|
Main export partners
| France 21.6% |
United Kingdom 5.8%
Switzerland 4.7% (2012 est.)
|Imports||$23.8 billion (2014 est.)|
|Minerals, metals, foodstuffs, quality consumer goods|
Main import partners
| France 30.9% |
United States 8.2%
Netherlands 5.1% (2012 est.)
|$30.7 billion (2013 est.)|
Gross external debt
|€11.2 billion (2014)|
|18.4% of GDP (2012 est.)|
|Revenues||€14.2 billion (2014 est.)|
|Expenses||€14.8 billion (2014 est.)|
|Economic aid||donor: ODA, $0.24 billion (2004)|
|€0.7 billion (October 2015)|
In 2013 the GDP was $60.54 billion of which services, including the financial sector, produced 86%. The financial sector comprised 36% of GDP, industry comprised 13.3% and agriculture only 0.3%.
Banking is the largest sector in the Luxembourg economy. In the 2017 Global Financial Centres Index, Luxembourg was ranked as having the 18th most competitive financial center in the world, and third most competitive in Europe after London and Zürich. The country has specialised in the cross-border fund administration business. As Luxembourg's domestic market is relatively small, the country's financial centre is predominantly international. At the end of March 2009, there were 152 banks in Luxembourg, with over 27,000 employees. Political stability, good communications, easy access to other European centres, skilled multilingual staff, a tradition of banking secrecy and cross-border financial expertise have all contributed to the growth of the financial sector. These factors have contributed to a Corruption Perceptions Index of 8.3 and a DAW Index ranking of 10 in 2012; the latter the highest in Europe. Germany accounts for the largest-single grouping of banks, with Scandinavian, Japanese, and major US banks also heavily represented. Total assets exceeded €929 billion at the end of 2008. More than 9,000 holding companies are established in Luxembourg. The European Investment Bank—the financial institution of the European Union—is also located there.
Concern about Luxembourg's banking secrecy laws, and its reputation as a tax haven, led in April 2009 to it being added to a "grey list" of nations with questionable banking arrangements by the G20, a list from which it was removed in 2009. This concern has led Luxembourg to modify its tax legislation to avoid conflict with the tax authorities of European Union Members. For example, the classic tax exempt 1929 Holding Company was outlawed 31 December 2010, as it was deemed an illegal state aid by the European Commission.
A key event in the economic history of Luxembourg was the 1876 introduction of English metallurgy. The refining process led to the development of the steel industry in Luxembourg and founding of the Arbed company in 1911.
The restructuring of the industry and increasing government ownership in Arbed (31%) began as early as 1974. As a result of timely modernization of facilities, cutbacks in production and employment, government assumption of portions of Arbed's debt, and recent cyclical recovery of the international demand for steel, the company is again profitable. Its productivity is among the highest in the world. US markets account for about 6% of Arbed's output. The company specializes in production of large architectural steel beams and specialized value-added products. There has been, however, a relative decline in the steel sector, offset by Luxembourg's emergence as a financial center. In 2001, through the merger with Aceralia and Usinor, Arbed became Arcelor. Arcelor was taken over in 2006 by Mittal Steel to form Arcelor-Mittal, helmed by Lakshmi Mittal, the largest steel producer in the world.
Government policies promote the development of Luxembourg as an audiovisual and communications center. Radio-Television-Luxembourg is Europe's premier private radio and television broadcaster. The government-backed Luxembourg satellite company "Société européenne des satellites" (SES) was created in 1986 to install and operate a satellite telecommunications system for transmission of television programs throughout Europe. The first SES Astra satellite, the 16-channel RCA 4000 Astra 1A, was launched by the Ariane Rocket in December 1988. SES presently constitutes the world largest satellite services company in terms of revenue.
Tourism is an important component of the national economy, representing about 8.3% of GDP in 2009 and employing some 25,000 people or 11.7% of the working population. Despite the current crisis, the Grand Duchy still welcomes over 900,000 visitors a year who spend an average of 2.5 nights in hotels, hostels or on camping sites. Business travel is flourishing representing 44% of overnight stays in the country and 60% in the capital, up 11% and 25% between 2009 and 2010.
Luxembourg's small but productive agricultural sector is highly subsidized, mainly by the EU and the government. It employs about 1–3% of the work force. Most farmers are engaged in dairy and meat production. Vineyards in the Moselle Valley annually produce about 15 million litres of dry white wine, most of which is consumed within Luxembourg and also in Germany, France, and Belgium on a lesser scale.
The following table shows the main economic indicators in 1980–2017. Inflation under 2% is in green.
(in Bil. US$ PPP)
|GDP per capita
(in US$ PPP)
(in % of GDP)
|1980||5.7||15,611||3.2 %||6.3 %||0.7 %||n/a|
|1981||6.3||17,153||0.8 %||8.1 %||1.0 %||n/a|
|1982||6.7||18,391||1.0 %||9.4 %||1.3 %||n/a|
|1983||7.1||19,478||1.9 %||8.7 %||1.6 %||n/a|
|1984||7.7||21,106||4.7 %||5.6 %||1.7 %||n/a|
|1985||8.4||22,956||5.6 %||14.8 %||1.7 %||n/a|
|1986||9.4||25,638||10.0 %||0.3 %||1.5 %||n/a|
|1987||10.1||27,155||4.0 %||−0.1 %||1.7 %||n/a|
|1988||11.3||30,223||8.5 %||1.4 %||1.5 %||n/a|
|1989||12.9||34,137||9.8 %||3.4 %||1.4 %||n/a|
|1990||14.1||36,863||5.3 %||3.7 %||1.3 %||n/a|
|1991||15.8||40,826||8.6 %||3.1 %||1.4 %||n/a|
|1992||16.5||41,943||1.8 %||3.2 %||1.6 %||n/a|
|1993||17.6||44,115||4.2 %||3.6 %||2.1 %||n/a|
|1994||18.6||46,104||3.8 %||2.2 %||2.7 %||n/a|
|1995||19.3||47,516||1.4 %||1.9 %||3.0 %||8.9 %|
|1996||19.9||48,412||1.5 %||1.2 %||3.2 %||8.6 %|
|1997||21.5||51,502||5.9 %||1.4 %||3.3 %||8.5 %|
|1998||23.1||54,757||6.5 %||1.0 %||3.1 %||8.1 %|
|1999||25.4||59,529||8.4 %||1.0 %||2.9 %||7.1 %|
|2000||28.8||65,079||8.4 %||3.8 %||2.2 %||6.5 %|
|2001||29.6||67,331||2.5 %||2.4 %||2.0 %||6.9 %|
|2002||31.2||70,249||3.8 %||2.1 %||2.5 %||6.8 %|
|2003||32.3||72,127||1.6 %||2.5 %||3.3 %||6.8 %|
|2004||34.4||75,663||3.6 %||3.2 %||4.0 %||7.3 %|
|2005||36.7||79,480||3.2 %||3.7 %||4.0 %||7.4 %|
|2006||39.7||84,722||5.2 %||3.0 %||4.0 %||7.8 %|
|2007||44.2||92,837||8.4 %||2.7 %||4.0 %||7.7 %|
|2008||44.5||91,977||−1.3 %||4.1 %||4.1 %||14.9 %|
|2009||42.9||86,894||−4.4 %||0.0 %||5.6 %||15.7 %|
|2010||45.5||90,662||4.9 %||2.8 %||6.0 %||19.8 %|
|2011||47.6||92,970||2.5 %||3.7 %||6.0 %||18.7 %|
|2012||48.3||92,102||−0.4 %||2.9 %||6.1 %||21.7 %|
|2013||50.9||94,824||3.7 %||1.7 %||6.8 %||23.7 %|
|2014||54.8||99,738||5.8 %||0.7 %||7.1 %||22.7 %|
|2015||57.0||101,255||2.9 %||0.1 %||6.8 %||22.0 %|
|2016||59.5||103,286||3.1 %||0.0 %||6.3 %||20.8 %|
|2017||62.8||106,373||3.5 %||2.1 %||5.8 %||23.0 %|
Establishing accounts depends on the size of companies, and referring to three criteria: total of the balance sheet (total of assets without losses of the accounting year), the net amount of the turnover (net, such as it appears on the profit and loss account) and the average number of the workforce.
The control of medium and big companies must be made by one or several independent auditors of companies, appointed by the general assembly among the members of the Institute of Independent Auditors of Companies. The control of small companies must be made by an accountant appointed by the general assembly for definite duration. The conclusion of the independent auditor’s report can be:
The accountants associations have difficulties getting organized because of the importance of the State in the accounting system.
Labour relations have been peaceful since the 1930s. Most industrial workers are organized by unions linked to one of the major political parties. Representatives of business, unions, and government participate in the conduct of major labour negotiations.
Foreign investors often cite Luxembourg's labour relations as a primary reason for locating in the Grand Duchy. Unemployment in 1999 averaged less than 2.8% of the workforce, but reached 4.4% by 2007.
In 1978, Luxembourg tried to build a 1,200 MW nuclear reactor but dropped the plans after threats of major protests. Currently, Luxembourg uses imported oil and natural gas for the majority of its energy generation.
In February 2016, the Government of Luxembourg announced that it would attempt to "jump-start an industrial sector to mine asteroid resources in space" by, among other things, creating a "legal framework" and regulatory incentives for companies involved in the industry. By June 2016, announced that it would "invest more than US$200 million in research, technology demonstration, and in the direct purchase of equity in companies relocating to Luxembourg." By April 2017, three space mining corporations had established headquarters established in Luxembourg.
Luxembourg's new law took effect in August 2017, ensuring that private operators can be confident about their rights on resources they extract in space. The law provides that space resources can be owned by anyone, not just by Luxembourg citizens or companies."
Luxembourg has efficient road, rail and air transport facilities and services. The road network has been significantly modernised in recent years with 147 km of motorways connecting the capital to adjacent countries. The advent of the high-speed TGV link to Paris has led to renovation of the city's railway station while a new passenger terminal at Luxembourg Airport has recently been opened. There are plans to introduce trams (first core line operative in end 2017) in the capital and light-rail lines in adjacent areas within the next few years. The airport has known a sustained growth in passenger numbers during the last years ( 2015: 2.7 mio, 2020 : 4 mio expected), and the second stage of expansion is on its way.
According to a note from the Luxembourg statistical agency, the Luxembourg economy was set to grow 4.0% in 2011. The economic situation was particularly dynamic in late 2010 and early 2011 but there were signs of a slowdown, both in the international economic environment and in terms of national indicators. GDP growth was set to enter a recession in 2012.
The Luxembourg government on Feb. 3 announced it would seek to jump-start an industrial sector to mine asteroid resources in space by creating regulatory and financial incentives.
The Government said it planned to create a legal framework for exploiting resources beyond Earth's atmosphere, and said it welcomed private investors and other nations.
Antoine Wehenkel (10 February 1910 – 27 February 1992) was a Luxembourgian politician and engineer. He was a member of the Luxembourg Socialist Workers' Party (LSAP), of which he was President (1970 – 1974).
Wehenkel was first elected to the Chamber of Deputies in 1951, and would continue to be so until 1974. Wehenkel withdrew from sitting as a deputy to take his place in the government of Pierre Werner between 1964 and 1969, holding the position of Minister for the Budget and the newly created office of Minister for the National Economy and Energy. With the LSAP ejected from government by a shift of coalition in 1969, Wehenkel turned to be President of the Chamber, which he remained until 1974, when he retired from politics.
He was a member of the communal council of Luxembourg City between 1951 and 1964.BGL BNP Paribas
BGL BNP Paribas (formerly Banque Générale du Luxembourg or BGL) is a Luxembourg bank founded on 29 September 1919. Since May 2009, the bank has been a member of the BNP Paribas group. It is the fifth-largest bank in the Grand Duchy of Luxembourg and is the country's second-largest employer.BGL BNP Paribas was ranked as the top bank in Luxembourg based on tier 1 capital by The Banker magazine in a 2014 ranking.Banque de Luxembourg
Banque de Luxembourg is a financial institution in Luxembourg which primarily focuses on wealth management and high-net-worth individualsBelgium–Luxembourg Economic Union
The Belgium–Luxembourg Economic Union (Dutch: Belgisch-Luxemburgse Economische Unie, French: Union économique belgo-luxembourgeoise, Luxembourgish: Belsch-Lëtzebuerger Wirtschaftsunioun), abbreviated to BLEU or UEBL, is an economic union between Belgium and Luxembourg, two countries in the Benelux Union.
BLEU was created by a treaty, signed on 25 July 1921, despite a referendum against such a proposal, between Belgium and Luxembourg, and came into effect upon ratification by the Luxembourg Chamber of Deputies on 22 December 1922. Under the terms of the treaty, the economic frontier was lifted and the Belgian franc and Luxembourg franc were set at a fixed parity (though revised in 1935 and 1944) establishing a monetary union, which existed up until the introduction of the Euro. The original treaty lasted for fifty years, expiring in 1972; this was extended for ten years in 1982 and again in 1992. On 18 December 2002, the two countries and the three regions of Belgium signed a new convention.
It has been seen as the forerunner of Benelux Union, which was established as the Benelux Customs Union in 1944 by the London Customs Convention and also includes the Netherlands. While many aims of the BLEU have been subsumed by the Benelux Union, and later the European Union, it still has some relevance in being able to decide more precise measures than these organisations. International trade statistics were available for BLEU only as a combined entity until 1999, when European Community rules required split information.Colette Flesch
Colette Flesch (born 16 April 1937 in Dudelange) is a Luxembourgish politician and former fencer.Gaston Thorn
Gaston Egmond Thorn (3 September 1928 – 26 August 2007) was a Luxembourg politician who served in a number of high-profile positions, both domestically and internationally. Amongst the posts that he held were the 19th Prime Minister of Luxembourg (1974–79), President of the United Nations General Assembly (1975), and the seventh President of the European Commission (1981–85).Henri Grethen
Henri Grethen (born 16 July 1950) is a politician from Luxembourg.
Grethen was born in Esch-sur-Alzette. He attended school in Echternach and studied in Luxembourg and Liège. In 1980, he became secretary of the Democratic Party, and in 1999, he became Minister for Economy and Transport.
He currently works for the European Court of Auditors as representative for Luxembourg.Jacques Poos
Jacques Poos (born 3 June 1935) is a Luxembourgian politician.Jeannot Krecké
Jeannot Krecké (born 26 April 1950 in Luxembourg City) is a Luxembourgish politician of the Luxembourg Socialist Workers' Party. He is a former Luxembourgian football (soccer) player.List of Ministers for the Economy and Foreign Trade of Luxembourg
The Minister for the Economy and Foreign Trade (French: Ministre de l'Économie et du Commerce extérieur) is a position in the Luxembourgian cabinet, either by itself or combined with other positions, since 15 July 1964.
From 15 July 1964 until 6 February 1969, it was known as the Minister for the National Economy and Energy (French: Ministre de l'Économie nationale et de l’Énergie). In 1969, the Energy brief was separated and recombined with that of the Minister for Transport, leaving the Economy brief to amalgamate with others to create the post of Minister for the National Economy, Middle Class, and Tourism (French: Ministre de l'Économie nationale, des Classes moyennes et du Tourisme). Tourism was separated from 16 September 1977, creating the Minister for the National Economy and the Middle Class (French: Ministre de l'Économie nationale et des Classes moyennes). The position of Minister for the Economy (French: Ministre de l'Économie) was created on 14 July 1989, as it remained since, despite the role's absorption of other responsibilities. In 2009, it was renamed to the current 'Minister for the Economy and Foreign Trade'.Luxembourg Stock Exchange
The Luxembourg Stock Exchange, LuxSE (French: Bourse de Luxembourg) is based in Luxembourg City at 35A boulevard Joseph II.
The Chairman of the Board is Frank Wagener and the President of the Executive Committee and Chief Executive Officer is Robert Scharfe.
The Exchange has pre-opening sessions from 07:15am to 09:00am and normal trading sessions from 09:00am to 05:35pm from Monday to Friday included, except for holidays declared by the Exchange in advance.Marcel Mart
Marcel Mart (born 10 May 1927 in Esch-sur-Alzette) is a retired Luxembourgish politician, jurist, and businessperson.
A member of the Democratic Party, Mart served in the government under Pierre Werner (1969–1974) and Gaston Thorn (1974–1977). In 1977, he was named as Luxembourg's representative in the European Court of Auditors, in which he sat for two six-year terms, during which time he also served as President (1984–1989).Robert Goebbels
Robert Goebbels (born 3 April 1944) is a former politician in Luxembourg, and a former Member of the European Parliament for the Luxembourg Socialist Workers' Party, part of the Party of European Socialists.He started his career as one of the editors in charge of international affairs in a Luxembourg daily. From 1972 to 1974 he was elected three times chairman of the Luxembourg Association of Journalists.
His political career started as president of the Young Socialists in 1969. He was elected secretary general of the Luxembourg Socialist Party in 1971 and regularly re-elected up to 1984.
In 1976 he was elected to the City Council of Luxembourg, and re-elected later on for 3 additional mandates.
In 1984 he was elected to the National Parliament, and afterwards re-elected 4 times. That same year, he was appointed to the Government as Secretary of State for Foreign Affairs, International Trade and Development Cooperation and as Secretary of State for Economic Affairs.
From 1984 to 1989 he attended numerous ASEAN post-ministerial conferences and co-chaired in 1985 in Bangkok the first ASEAN-EU- Conference on Economic Affairs.
In 1985 he invited to the signature of the first Schengen-Agreement. In the following years he was Luxembourg’s negotiator for the Schengen Convention of 1990.
In 1986 he signed for Luxembourg the European Single Act, which launched the European single market.
In 1986 he was also appointed vice-chairman of the GATT-Conference in Punta del Este, which launched the Uruguay Round.
In 1989 Goebbels was appointed Minister of the Economy, Minister of Public Works, Minister of Transport. In the latter capacity he chaired the European Conference of Ministers of Transport.
In 1994 he was appointed Minister of the Economy, Minister of Energy, Minister of Public Works. As member of the Ecofin-Council of the EU he was involved in the launching of the Euro.
In 1999 Goebbels was elected to the European Parliament, re-elected in 2004 and 2009.From 1999 to 2009 he served as vice-chair of the Socialist Group in the European Parliament, and as spoke-person of his group on Economic and Monetary Affairs. In addition he chaired the Lisbon network on Growth and Investments of the European Socialist Party. In 2001 Goebbels was elected chairman of the Committee on Human Genetics of the European Parliament.
In 2006 Goebbels was appointed by the Government as High Commissioner for the Luxembourg Pavilion at the Shanghai World Expo 2010.
In his 15 years in the European Parliament Goebbels was rapporteur or co-rapporteur of numerous European legislations.
He was a member of the ACP-EU joint Parliamentary Assembly and a member of the EP-Delegation to the ASEAN countries. From 2009 to 2014 he served as first vice-president of the EP-delegation to ASEAN and attended in that capacity most of the meetings of the ASEAN Inter Parliamentary Assembly. In 2014 he was appointed EP-Member of the EU-task force for Myanmar. He served also in 2014 as chair of the EP observation-mission to the presidential elections in Egypt.
In July 2014 Goebbels retired from active politics. He continues to publish articles in the national and international press.
In March 2016 the Luxembourg Government appointed Robert Goebbels as the Luxembourg representative to the ASEF Board of Governors.Social welfare in Luxembourg
Luxembourg has an extensive welfare system. It comprises a social security, health, and pension funds. The labor market is highly regulated, and Luxembourg is a corporatist welfare state. Enrollment is mandatory in one of the welfare schemes for any employed person. Luxembourg's social security system is the Centre Commun de la Securite Sociale (CCSS). Both employees and employers make contributions to the fund at a rate of 25% of total salary, which cannot eclipse more than five times the minimum wage. Social spending accounts for 21.8% of GDP.Société Nationale de Crédit et d'Investissement
Société Nationale de Crédit et d'Investissement or SNCI is a public-law banking institution in Luxembourg City designed to encourage business investments, start-ups and research initiatives. Founded in 1978, it is wholly owned by the State of Luxembourg.Steel industry in Luxembourg
In the industrial sector, the Luxembourg steel industry continues to occupy the first place in the country, even after the industrial reforms which have taken place since the 1960s.Tourism in Luxembourg
Tourism in Luxembourg is an important component of the national economy, representing about 8.3% of GDP in 2009 and employing some 25,000 people or 11.7% of the working population. Despite the 2008–2012 global recession, the Grand Duchy still welcomes over 900,000 visitors a year who spend an average of 2.5 nights in hotels, hostels or on camping sites. Business travel is flourishing representing 44% of overnight stays in the country and 60% in the capital, up 11% and 25% between 2009 and 2010. Published by the World Economic Forum in March 2011, the Travel and Tourism Competitiveness Report puts Luxembourg in 15th place worldwide, up from 23rd place in 2009.Major destinations are historic Luxembourg City, the medieval castle of Vianden, Echternach with its abbey and the wine districts of the Moselle valley. The Mullerthal with its rocky cliffs in the east and the mountainous Oesling district in the Ardennes to the north are also favourites for outdoor enthusiasts.Luxembourg has good road and rail and air connections with the rest of Europe, making it an increasingly popular destination for international meetings as well as for extended weekend stays. Over half the visitors to Luxembourg come from the Netherlands, Belgium and Germany with substantial numbers from France, the United Kingdom and the United States. Camping is popular in Luxembourg, particularly with the Dutch, who camp for much longer than other nationalities, especially in the Ardennes and the Mullerthal.
|States with limited|