Despite household consumption rising more rapidly than the rest of Europe, growth in Luxembourg is inferior in comparison to population, economic and income growth.
Since the early 2000s, household consumption in Luxembourg has grown much faster than that of other European countries. However, this growth is much less pronounced in relation to population growth, the growth of the economy as a whole, and income growth.
The per capita consumption of households in Luxembourg has tended to stagnate since 2003 and shows no significant rebound in the context of a cyclical recovery in recent years. The share of household income devoted to consumption also follows a marked downward trend in Luxembourg, contrary to what can be observed in the euro area. This decline, which is accompanied by a trend increase in the saving rate, emerges as a very widespread phenomenon across the various consumer items.
Between 2000 and 2016, the volume of household consumption expenditure in Luxembourg increased by about 2% per year on average. This is almost double the performance at European level over the same period (+1.2% for the EU 28, +0.9% for the euro area), which suggests that the consumption of residents of the Grand Duchy was very dynamic. However, several elements lead to nuance this idea. In fact, growth in consumption in Luxembourg is largely explained by population growth, the highest in Europe, at +1.8% per year on average since 2000, compared with only 0.3% for the euro area as a whole.
Considering per capita consumption, which makes it possible to neutralise the demographic effect, it has a much less expansive pattern, and even a trend of near-stagnation since 2003.