Economic overview Luxembourg, in 36 editions.

The stable economy features moderate growth, low inflation, and negligible unemployment. Agriculture is based on small but highly productive family-owned farms. The industrial sector, until recently dominated by steel, has become increasingly more diversified, particularly toward high-technology firms. During the past decade decade, growth in the financial sector has more than compensated for the decline in steel. Services, especially banking, account for a growing proportion of the economy. Luxembourg participates in an economic union with Belgium on trade and most financial matters and is also closely connected economically with to the Netherlands.

The stable economy features moderate growth, low inflation, and negligible
unemployment. Agriculture is based on small but highly productive
family-owned farms. The industrial sector, until recently dominated by
steel, has become increasingly more diversified, particularly toward
high-technology firms. During the past decade, growth in the financial
sector has more than compensated for the decline in steel. Services,
especially banking, account for a growing proportion of the economy.
Luxembourg participates in an economic union with Belgium on trade and most
financial matters and is also closely connected economically to the
Netherlands.

The stable stable, prosperous economy features moderate growth, low
inflation, and negligible
unemployment. Agriculture is based on small
but highly productive
family-owned farms. The industrial sector, until
recently dominated by
steel, has become increasingly more diversified,
particularly toward
high-technology firms. During the past decade,
growth in the financial
sector has more than compensated for the
decline in steel. Services,
especially banking, account for a growing
proportion of the economy.
Luxembourg participates in an economic
union with Belgium on trade and most
financial matters and matters, is also
closely connected economically to the Netherlands, and as a member of
Netherlands. the 12-member European Union enjoys the advantages of the open
European market.

The stable, prosperous economy features moderate growth, low
inflation, and negligible unemployment. Agriculture is based on small
but highly productive family-owned farms. The industrial sector, until
recently dominated by steel, has become increasingly more diversified,
particularly toward high-technology firms. During the past decade,
growth in the financial sector has more than compensated for the
decline in steel. Services, especially banking, account for a growing
proportion of the economy. Luxembourg participates in an economic
union with Belgium on trade and most financial matters, is also
closely connected economically to the Netherlands, and as a member of
the 12-member 15-member European Union enjoys the advantages of the open
European market.

The stable, prosperous economy features moderate growth, low
inflation, and negligible unemployment. Agriculture is based on small
but highly productive family-owned farms. The industrial sector, until
recently dominated by steel, has become increasingly more diversified,
particularly toward high-technology firms. During the past decade,
growth in the financial sector has more than compensated for the
decline in steel. Services, especially banking, account for a growing
proportion of the economy. Luxembourg participates in an economic
union with Belgium on trade and most financial matters, is also
closely connected economically to the Netherlands, and and, as a member of
the 15-member European Union EU, enjoys the advantages of the open
European market.

The stable, prosperous economy features moderate
growth, low inflation, and negligible low unemployment. Agriculture is based on
small but highly productive family-owned farms. The industrial sector, until recently
dominated by steel, has become increasingly more diversified, particularly toward high-technology firms. diversified. During
the past decade, decades, growth in the financial sector has more than
compensated for the decline in steel. Services, especially banking,
account for a growing proportion of the economy. Luxembourg
participates in an economic union with Belgium on trade and most
financial matters, is also closely connected economically to the
Netherlands, and, as a member of the EU, enjoys the advantages of the
open European market.

The stable, prosperous economy features moderate
moderate growth, low inflation, and low unemployment. Agriculture is based on
small family-owned farms. The industrial
sector, until recently
dominated by steel, has become increasingly
more diversified. During
the past decades, growth in the financial
sector has more than
compensated for the decline in steel. Services,
especially banking,
account for a growing proportion of the economy. Luxembourg
participates in an economic union with Belgium Agriculture is based on small family-owned farms. Luxembourg has
especially close trade and most
financial matters, is also closely connected economically ties to Belgium and the
Netherlands, and, and as a member of the EU, enjoys the advantages of the
open European market. It joined with 10 other EU members to launch
the euro on 1 January 1999.

The stable, prosperous high-income economy features
moderate growth, low inflation, and low unemployment. The industrial
sector, until recently dominated by steel, has become increasingly
more diversified. diversified to include chemicals, rubber, and other products. During the past decades, growth in the financial
sector has more than compensated for the decline in steel. Services,
especially banking, account for a growing proportion of the economy.
Agriculture is based on small family-owned farms. Luxembourg has
especially close trade and financial ties to Belgium and the
Netherlands, and as a member of the EU, enjoys the advantages of the
open European market. It joined with 10 other EU members to launch
the euro on 1 January 1999.

The stable, high-income economy features moderate solid growth, low inflation, and low unemployment. The industrial sector, until recently initially dominated by steel, has become increasingly more diversified to include chemicals, rubber, and other products. During the past decades, growth Growth in the financial sector has more than compensated for the decline in steel. Services, especially banking, account for a growing substantial proportion of the economy. Agriculture is based on small family-owned farms. The economy depends on foreign and trans-border workers for 30% of its labor force. Luxembourg has especially close trade and financial ties to a custom union with Belgium and the Netherlands, and and, as a member of the EU, enjoys the advantages of the open European market. It joined with 10 other EU members to launch the euro on 1 January 1999.

The This stable, high-income economy features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector sector, which now accounts for about 22% of GDP, has more than compensated for the decline in steel. Services, especially banking, account for a substantial proportion of the economy. Most banks are foreign-owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and trans-border workers for 30% of its labor force. Luxembourg Although Luxembourg, like all EU members, has a custom union with Belgium and the Netherlands, and, as a member of the EU, enjoys the advantages of suffered from the open European market. It joined with 10 other EU members to launch global economic slump, the euro on 1 January 1999. country has maintained a fairly strong growth rate.

This stable, high-income economy features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 22% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and trans-border workers for more than 30% of its labor force. Although Luxembourg, like all EU members, has suffered from the global economic slump, the country has maintained a fairly strong growth rate. rate and enjoys an extraordinarily high standard of living.

This stable, high-income economy - in between France, Belgium, and Germany - features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 22% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and trans-border cross-border workers for more than 30% of its labor force. Although Luxembourg, like all EU members, has suffered from the global economic slump, the country has maintained a fairly strong growth rate and enjoys an extraordinarily high standard of living.

This stable, high-income economy - in between benefitting from its proximity to France, Belgium, and Germany - features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 22% 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and cross-border workers for more than 30% of its labor force. Although Luxembourg, like all EU members, has suffered from the global economic slump, the country enjoys an extraordinarily high standard of living. living - GDP per capita ranks first in the world.

This stable, high-income economy - benefitting benefiting from its proximity to France, Belgium, and Germany - features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and cross-border workers for more than 30% about 60% of its labor force. Although Luxembourg, like all EU members, has suffered from the global economic slump, the country enjoys an extraordinarily high standard of living - GDP per capita ranks first second in the world.

This stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned foreign owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and cross-border workers for about 60% of its labor force. Although Luxembourg, like all EU members, has suffered from the global economic slump, slump in the early part of this decade, the country enjoys continues to enjoy an extraordinarily high standard of living - GDP per capita ranks second in the world. world, after Qatar. After two years of strong economic growth in 2006-07, turmoil in the world financial markets will slow Luxembourg's economy in 2008, but growth will remain above the European average.

This stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - features has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and cross-border workers for about 60% of its labor force. Although Luxembourg, like all EU members, suffered from the global economic slump in the early part of this decade, the country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks second third in the world, after Liechtenstein and Qatar. After two years of strong economic growth in 2006-07, turmoil in the world financial markets will slow trimmed Luxembourg's economy in 2008, but growth will remain above the European average. 2008.

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. dealings, but Luxembourg has lost some of its advantages as a tax haven because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 60% of its labor force. Although Luxembourg, like all EU members, suffered from the global economic slump crisis that began in the early part of this decade, late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted and 3.4% in 2009, but rebounded 2.6% in 2010. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks third in the world, after Liechtenstein and Qatar. After two years of strong economic growth Qatar, and is the highest in 2006-07, turmoil the EU. Turmoil in the world financial markets trimmed Luxembourg's economy and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2008. 2009, however, the deficit was cut below 3% in 2010.

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a tax haven because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 60% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted and 3.4% 3.7% in 2009, but rebounded 2.6% 3.2% in 2010. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks third in the world, after Liechtenstein and Qatar, and is the highest in the EU. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009, however, 2009. Nevertheless, the deficit was cut below 3% to 1.4% in 2010.

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned foreign-owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a tax haven because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 60% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted and 3.7% 3.6% in 2009, but rebounded 3.2% in 2010. 2010-11 before slowing again in 2012. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks third among the highest in the world, after Liechtenstein and Qatar, and is the highest in the EU. euro zone. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009. Nevertheless, the deficit was cut to 1.4% 1.1% in 2010. 2011 and 0.9% in 2012. Even during the financial crisis and recovery, Luxembourg retained the highest current account surplus as a share of GDP in the euro zone, owing largely to their strength in financial services. Public debt remains among the lowest of the region although it has more than doubled since 2007 as percentage of GDP. Luxembourg's economy, while stabile, grew slowly in 2012 due to ongoing weak growth in the euro area. Authorities have strengthened supervision of domestic banks because of their exposure to the activities of foreign banks.

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% 27% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a favorable tax haven location because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 60% 40% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted 3.6% in 2009, but rebounded in 2010-11 before slowing again in 2012. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world, and is the highest in the euro zone. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009. Nevertheless, the deficit was cut to 1.1% in 2011 and 0.9% in 2012. Even during the financial crisis and recovery, Luxembourg retained the highest current account surplus as a share of GDP in the euro zone, owing largely to their strength in financial services. Public debt remains among the lowest of the region although it has more than doubled since 2007 as percentage of GDP. Luxembourg's economy, while stabile, grew slowly in 2012 due to ongoing weak growth in the euro area. Authorities have strengthened supervision of domestic banks because of their exposure to the activities of foreign banks.

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, automobile components, and other products. Growth in the financial sector, which now accounts for about 27% 36% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a favorable tax location because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 40% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted 3.6% in 2009, but rebounded in 2010-11 before slowing again in 2012. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world, and is the highest in the euro zone. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009. Nevertheless, the deficit was cut to 1.1% in 2011 and 0.9% in 2012. Even during the financial crisis and recovery, Luxembourg retained the highest current account surplus as a share of GDP in the euro zone, owing largely to their strength in financial services. Public debt remains among the lowest of the region although it has more than doubled since 2007 as percentage of GDP. Luxembourg's economy, while stabile, grew slowly in 2012 due to ongoing weak growth in the euro area. Authorities have strengthened supervision of domestic banks because of their exposure to the activities of foreign banks.

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, machinery and equipment, rubber, automobile automotive components, and other products. Growth in the The financial sector, which now accounts for about 36% of GDP, has more than compensated for is the decline leading sector in steel. Most banks are foreign-owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a favorable tax location because of OECD and EU pressure. the economy. The economy depends on foreign and cross-border workers for about 40% 39% of its labor force. Luxembourg, like all EU members, suffered from Luxembourg experienced uneven economic growth in the aftermath of the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, 2008. Luxembourg's economy GDP contracted 3.6% in 2009, but rebounded in 2010-11 before slowing 2010-12, fell again in 2012. 2013, but recovered in 2014. Unemployment has remained below the EU average despite having increased from a historically-low rate of 4% in the 2000s to 7% in 2014. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world, world and is the highest in the euro zone. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009. Nevertheless, the deficit was cut to 1.1% in 2011 and 0.9% in 2012. Even during the financial crisis and recovery, Luxembourg retained has one of the highest current account surplus surpluses as a share of GDP in the euro zone, owing largely to their strength in financial services. Public debt remains among and it maintains a healthy budgetary position and the lowest of public debt levels in the region although it region. Luxembourg has more than doubled since 2007 lost some of its advantage as percentage a favorable tax location because of GDP. Luxembourg's economy, while stabile, grew slowly in 2012 due to ongoing weak growth in OECD and EU pressure. In 2015 the euro area. Authorities have strengthened supervision of domestic banks because government’s compliance with EU requirements to implement automatic exchange of their exposure tax information on savings accounts - thus ending banking secrecy - has depressed banking activity and dampened GDP growth. Likewise, changes to the activities of foreign banks. way EU members collect taxes from e-Commerce has cut Luxembourg’s tax revenues, requiring the government to raise additional levies and to reduce some direct social benefits.

This small, stable, high-income economy has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, machinery and equipment, rubber, automotive components, and other products. The financial sector, which accounts for about 36% of GDP, is the leading sector in the economy. The economy depends on foreign and cross-border workers for about 39% of its labor force.
Luxembourg experienced uneven economic growth in the aftermath of the global economic crisis that began in late 2008. Luxembourg's GDP contracted 3.6% in 2009, rebounded in 2010-12, fell again in 2013, 2013-14, but recovered in 2014. 2015. Unemployment has remained below the EU average despite having increased from a historically-low historically low rate of 4% in the 2000s to 7% 7.1% in 2014.
The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world and is the highest in the euro zone. 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 levels level in the region.
Luxembourg has lost some of its advantage as a favorable tax location because of OECD and EU pressure. In 2015 2015, the government’s compliance with EU requirements to implement automatic exchange of tax information on savings accounts - thus ending banking secrecy - has depressed banking activity and dampened GDP growth. Likewise, changes to the way EU members collect taxes from e-Commerce e-commerce has cut Luxembourg’s tax revenues, requiring the government to raise additional levies and to reduce some direct social benefits.

This small, stable, high-income economy has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, machinery and equipment, rubber, automotive components, and other products. The financial sector, which accounts for about 36% of GDP, is Luxembourg, the leading sector only Grand Duchy in the economy. The economy depends on foreign world, is a landlocked country in northwestern Europe surrounded by Belgium, France, and cross-border workers for about 39% of Germany. Despite its labor force.
small landmass and small population, Luxembourg experienced uneven economic growth in the aftermath of is the global economic crisis that began in late 2008. Luxembourg's GDP contracted 3.6% in 2009, rebounded in 2010-12, fell again in 2013-14, but recovered second-wealthiest country in 2015. Unemployment has remained below the EU average despite having increased from world when measured on a historically low rate of 4% in the 2000s to 7.1% in 2014.
The country continues to enjoy an extraordinarily high standard of living - GDP gross domestic product (PPP) per capita ranks among the highest in the world and is the highest in the euro zone. 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 US, 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. 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 depressed constricted banking activity and dampened GDP growth. 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. benefits as part of the tax reform package of 2017.

This 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 fifth-wealthiest country in the world when measured on a gross domestic product (PPP) 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 position, with a 2017 surplus of 0.5% of GDP, and the lowest public debt level in the region.
Since 2002, the Luxembourg Government Luxembourg’s 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;, technologies, and most more recently, space technology and financial services technologies. The economy has evolved and flourished, posting a strong GDP growth rate – projected at 4.5% of 3.4% in 2017-2018, 2017, 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 because of 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 US, 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” "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. The tax reform package also included reductions in the corporate tax rate and increases in deductions for families, both intended to increase purchasing power and increase competitiveness.

This 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 fifth-wealthiest country in the world when measured on a gross domestic product (PPP) 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, with a 2017 surplus of 0.5% of GDP, and the lowest public debt level in the region.
Since 2002, Luxembourg’s 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 more recently, space technology and financial services technologies. The economy has evolved and flourished, posting strong GDP growth of 3.4% in 2017, far outpacing the European average of 1.8%.
Luxembourg remains a financial powerhouse – the financial sector accounts for more than 35% of GDP - because of 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 US, 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. The tax reform package also included reductions in the corporate tax rate and increases in deductions for families, both intended to increase purchasing power and increase competitiveness.

high-income EU and eurozone economy; global, highly capitalized banking sector; one of highest GDP-per-capita countries; trending toward recovery after economic contraction from energy-driven inflation, reduced exports strengthened domestic demand and investments, lower interest rates contributing to economic growth; challenges include pension-system sustainability, labor-market dynamics, and financial sector weakness energy price volatility