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Luxembourg Country Risk Report 20 2018

Luxembourg Country Risk Report 20 2018

Increased scrutiny of Luxembourg's tax regime is likely to lead to the departure of many multinationals that have established tax bases in the country. The UK could be a popular choice for these departing companies if it introduces low corporate tax rates to stay competitive post-Brexit. We do not believe that an MNC exodus would have a meaningful impact on Luxembourg's economy, given that most have little or no operational capacity in the country.

Luxembourg real GDP growth will continue to exceed that of many of its European peers over the next two years as its large financial services sector stands to benefit from the UK's exit from the European Union.

The financial sector will remain the driver of the economy over the next decade. High income levels coupled with low inflation will keep private consumption growth steady in the years ahead.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Growth To Outpace Eurozone Average
GDP By Expenditure Outlook
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GDP GROWTH FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: TOP FIVE GOODS EXPORTS 2016
TABLE: TOP FIVE IMPORTS IN 2016
Monetary Policy
ECB Normalisation Finally Nearing
Monetary Policy Framework
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES, 2017
Currency Forecast
EUR: Rally To Be Limited
TABLE: BMI EUROZONE CURRENCY FORECAST
Long-Term Economic Outlook
Growth To Remain On A Stable Trajectory
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 2: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
CSV To Head Up New Government
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Resilience In The Face Of Transition
Chapter 3: Demographic Outlook
Demographic Outlook
TABLE: POPULATION BY AGE GROUP
TABLE: POPULATION BY AGE GROUP, %
TABLE: POPULATION HEADLINE INDICATORS
TABLE: KEY POPULATION RATIOS
TABLE: URBAN AND RURAL POPULATION AND LIFE EXPECTANCY
Chapter 4: BMI Global Macro Outlook
Trade Tensions Take Centre Stage
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: LUXEMBOURG – MACROECONOMIC DATA & FORECASTS

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