Developing activities in areas other than finance would help to sustain growth and deal with the declining potential output and trend productivity growth that Luxembourg’s economy is facing.
Over the last two and a half decades, Luxembourg’s financial sector emerged as a leading international hub for asset management and investment funds and became a key contributor to growth.
Strengthening the research infrastructure and the education system, competition-friendly regulation in the services sector and raising female labour force participation are important for new innovative industries, skills and more economic diversification.
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This country note from Going for Growth 2015 for Luxembourg identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
Luxembourg is a rich and fast-growing country. However, inequality of disposable incomes has trended up modestly over the past decades and relative poverty has risen reflecting mainly the rapid growth of high incomes.
Country Notes from OECD Economic Policy Reforms: Going for growth 2011 presenting OECD recommendations for structural reform priorities for individual countries.
Rapid economic growth over the past two decades has substantially increased employment in Luxembourg, which has largely been met by in–flows of cross–border workers and, to a lesser extent, immigration.
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The future growth path in Luxembourg is likely to be weaker than in the past. Pension reform, together with fiscal consolidation, is required to put the public finances on a sustainable footing, while adaptability of the labour market need to be improved to avoid long-term unemployment.
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This note is taken from Chapter 3 of Economic Policy Reforms: Going for Growth 2010.
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External links to: recent economic data; current interest rates and exchange rates; latest macroeconomic reports; current outlook and projections; government budget information; speeches; relevant sites.