State statistics agency Statec has reported that Luxembourg’s GDP growth for 2024 is not as healthy as once thought, revising its estimate down to 0.4% from 1.0% in its previous quarterly flash forecast in June.
GDP in 2023, on the other hand, has been revised upward to 0.1% growth compared to a decline of 0.7% in June.
These figures come from Statec’s Conjoncture Flash, published on Tuesday, which predicts 0.6% growth quarter-on-quarter for the second quarter of 2025. This “indicates a continuation of the recovery in activity already observed in the previous two quarters,” Statec wrote.
The volume of business services was significantly revised downwards for both 2023 and 2024. On the other hand, financial activities were revised upward, especially in 2024, according to Statec. “These revisions mainly concern the results of insurance companies and financial auxiliaries,” the agency wrote.
Dynamic household consumption
Household consumption in the Grand Duchy is now higher and more dynamic than previously, Statec said, with an average annual increase in volume of 3.5% in 2023 and 2024, compared with only 1.5% previously.
“These new revised data do not alter the observation that economic activity has been very sluggish over the last three years, reflected in a sharp slowdown in job creation – particularly in the market sector – over this period,” Statec writes.
Investment spending remained down in 2023 and 2024, although the decline was less pronounced than in previous annual results, while foreign trade in non-financial services has also been significantly revised downwards for both exports and imports for 2024.
Average wage costs per person in Luxembourg rose by 4.4% year-on-year largely due to May’s automatic indexation of wages, which contributed 1.7 percentage points to wages growth in the second quarter and marked an acceleration compared with the previous quarter of 2.8%.
Short-time working applications
Meanwhile, the government’s Comité de conjoncture, which includes Labour Minister Georges Mischo and Economy Minister Lex Delles, met on Wednesday to approve short-time working applications from some 57 companies. It ruled in favour of 47 applications affecting 4,489 full-time equivalent jobs, compared with 4,368 the previous month.
Employment Minister Georges Mischo and Economy Minister Lex Delles met with to discuss short-time working applications on Wednesday © Photo credit: MECO
Because the newest approvals are estimates, a more definitive measure of how many businesses are using short-time employment measures can be taken from the number of applications approved three months ago,
For instance, of the 51 provisional applications approved in May, only 27 businesses actually made use of short-time working (and two of those are still under review). So rather than the 1,661 beneficiaries forecast, just 1,132 employees were actually furloughed.