Luxembourg's GDP fell by almost 4% in Q4 of 2022. The National Institute of Statistics and Economic Studies (STATEC) maintains its forecast of 3.4% inflation in 2023.
On the other hand, the forecast for 2024 has been revised to 2.8%, down from 4.8% previously.
Following the wage indexation in April 2023, STATEC expects the next indexation to be triggered in Q4 2023, with a further indexation forecast for Q4 2024.
After seven consecutive quarters of growth, household consumption fell in the last quarter of 2022.
This decline can be seen in most Eurozone member states, but according to STATEC, "it was particularly strong in Luxembourg (-2.2% in real terms over a quarter, against -0.9% in the euro area)."
Consumption in Europe has been declining primarily in non-durable goods like food, alcohol, and tobacco. Consumption of fuel, gas, and heating oil has also decreased in terms of goods purchases.
STATEC notes that "the outlook for consumption remains weak for early 2023." As a result of rising interest rates, households have indicated "low purchasing intentions […] along with a renewed interest in saving."