On Friday, ratings agency Fitch confirmed Luxembourg’s Triple A rating, attesting that the Grand Duchy has a “stable economic outlook.” Minister of Finance Yuriko Backes celebrated the announcement as “excellent news.”
“This rating demonstrates our economy’s resilience and performance, even in the midst of multiple crises. It attests to the soundness of the government’s responsible fiscal policies, as well as the steps taken to increase household purchasing power and support businesses,” Backes stated.
In a statement released on Saturday, the Ministry of Finance stressed that this top rating “reflects the Grand Duchy’s good governance indicators, the soundness of public finances, and the country’s economic resilience despite the uncertainty of the current situation.”
Read also: “I’m worried about the future of the country”, says head of Chamber of Commerce
Fitch expects GDP growth in Luxembourg to fall to 1.5% in 2023, down from 2% in 2022, and believes that “thanks to the support measures put in place by the government in 2022, purchasing power, private consumption, and the level of investment will continue to develop favourably.”
Furthermore, Fitch expects inflation to fall to 3.9% in 2023 and 2.4% in 2024. The rise in property prices is also slowing down. On the other hand, the agency’s analysis highlights the risk of a rise in energy prices and slower-than-expected growth in Europe.
The rating agency also praises the government’s prudent budget management, indicating that this remains an important factor in its assessment. Fitch “expects the level of public debt to remain at all times below the 30% of GDP threshold set in the government programme.”
