Q2 indicators mainly positive for Luxembourg

ING International

While Luxembourg may suffer from the Q2 slowdown in European growth, indicators do not show that the effects will be long-lasting, as Statec confirmed Wednesday.

As may be expected for a financial centre like Luxembourg, markets outside the eurozone may have actually helped boost the Grand Duchy’s financial sector performance, as there was a 20 percent rise year-on-year in the number of total loans granted to non-financial companies. This increase was seen mainly among non-resident entities.

Luxembourg credit institutions are also expecting a greater demand for business credit and household mortgages, a trend seen across most of the eurozone as well. Current available indicators are not as strong, however, in manufacturing and construction. GDP figures for the Grand Duchy have not yet been released for Q2, however.

Car sales have also slowed, declining by 4.5 percent over one year. But when taking 2016 as a whole into account, sales actually rose 10.3 percent over one year in terms of volume.

Unemployment continues its downward trend, as does inflation, the latter having fallen for the third month in a row (at 0.8 percent) in Luxembourg, although the inflation downturn is mainly due to the slowdown in prices of things like alcohol, cars, etc.