Luxembourg economy to grow by 4.5% over next two years

Statec predicts economy will benefit from ‘balanced and sustained expansion’

Luxembourg’s economy will grow by around 4.5% annually over the next two years, the national statistics office Statec said on Thursday.

The economy will benefit from a “balanced and sustained expansion”, Statec predicted, supported by a pick-up in growth across the eurozone – expected to be around 2-2.5% until 2020.

However, the statistics bureau said Luxembourg’s economy, in the medium term, would slow to around 3% growth by 2022, against a backdrop of rising interest rates.

Statec said the economic expansion would benefit all sectors, be marked by a non-inflationary environment and see unemployment fall to an annual average of 5%.

Nevertheless, it warned there could be “significant negative effects” if there is a faster-than-expected increase in inflation resulting in a more rapid exit from the accommodating monetary policy central banks have adopted since the financial crisis.