Luxembourg

Luxembourg’s growth outlook remains favorable, as the ongoing global recovery boosts near-term activity. Economic, fiscal and financial sector policies are generally sound and unemployment is on a declining path. Risks arise from the possible impact on the economy and tax revenue of changing international tax rules; financial volatility, possibly triggered by increased risk perceptions and higher global interest rates; and Brexit. Closer to home, continuously rising real estate prices pose affordability problems and could lead to excessive indebtedness of some households, while the long-term sustainability of the pension system is not assured.