Credit ratings agency DBRS Morningstar confirmed a stable outlook for the Grand Duchy in its latest report, published on Friday evening.

Although the war in Ukraine has naturally had an impact, the credit ratings agency agreed that Luxembourg's public finances remained strong and stable.

In the first trimester of 2022, Luxembourg's GDP even managed to rise somewhat, although it dropped by 0.5% in the second trimester. The yearly outlook, however, saw a slowdown in growth, in part due to the rising energy prices.

Faced with an inflation rate of 8.8% in October 2022, according to the European price index, DBRS Morningstar said the negative impact of inflation on consumer and business sentiment is likely to be mitigated in 2023 thanks to the support measures decided as part of the recent tripartite meetings.
Although these support measures are likely to affect public finances over the coming year, the ratings agency said the Grand Duchy had the necessary leeway to balance any ill effects. Even if Luxembourg's public debt were to increase slightly in 2022 and 2023, it would still remain among the lowest in Europe.

Minister of Finance, Yuriko Backes, commented: "I am particularly delighted with this confirmation of the "AAA" rating, because it is the first that comes after September's Tripartite meetings, and the first  following the presentation of the draft budget for 2023. This decision bears witness to the merits of the successive packages of measures in favour of households and businesses, and it reminds us at the same time that a responsible and far-sighted policy continues to be required in order to preserve favourable prospects for the future."