The National Institute of Statistics and Economic Studies (STATEC) has revised its 2025 economic projections, now forecasting just 1% growth in both GDP and employment – a significant drop from its earlier estimate of 2.5%.
The updated outlook, released Wednesday morning, cites the lingering effects of the US-led trade war under President Donald Trump and ongoing global military conflicts as key factors dampening economic prospects.
STATEC Director Tom Haas highlighted that Luxembourg’s economy has stagnated since 2022, with a persistent state of polycrisis preventing a return to pre-pandemic stability. Major uncertainty continues to weigh on growth and employment, now at a historic low of 1% - far below the 3% levels seen in previous years. A modest recovery is anticipated in 2026.
On a positive note, inflation has fallen sharply since 2022 and currently stands just below 2%. STATEC predicts the next wage indexation will likely take effect in the third quarter of 2026.
