The next wage indexation in Luxembourg is expected to occur in the second quarter of 2025.

While inflation in Luxembourg has remained below 1% in 2024—largely due to low inflation in the services sector—the eurozone has achieved its 2% target.

Looking ahead, inflation in Luxembourg is forecast to gradually rise as energy price caps are eased, reaching 2.1% for the whole of 2025. This anticipated increase will trigger the spring 2025 indexation, aligning wages with inflationary trends.

Average wage growth has slowed significantly since 2023, increasing by just 1.2% year-on-year in the third quarter of 2024. This slowdown has been influenced by a weaker impact of recent indexations, reduced inflation, and temporary employer contribution cuts.

However, wage costs are set to rebound in 2025 with a projected +3.0% increase as these temporary measures expire. By 2026, growth in average wage costs is expected to stabilise at 2.4%.

Recent wage indexation dates included 1 September 2023, 1 April 2023, 1 February 2023 and 1 April 2022.