© Chamber of Commerce
The Chamber of Commerce is pushing for structural reforms as new data shows businesses remain below pre-pandemic optimism levels despite recent modest recovery.
Luxembourg's business climate has shown signs of recovery, though optimism has yet to rebound to pre-pandemic levels, according to a recent Chamber of Commerce survey.
The study, conducted in April–May among 580 companies with six or more employees, indicates cautious improvement amid ongoing economic headwinds.
Persistent geopolitical uncertainty – including the war in Ukraine, Middle East tensions, and the "erratic" trade war launched by US President Donald Trump – continues to weigh on businesses. The EU's sluggish economic outlook further compounds these pressures. Domestically, Luxembourg's growth forecasts remain subdued, with projections of just 1% GDP growth in 2025 and 2% in 2026 – well below the country's historical 3% average.
Carlo Thelen, Director of the Chamber of Commerce, attributes the sluggish recovery to structural hurdles, including over-regulation, high energy costs, and bureaucratic inefficiencies.
Calls for reform
Thelen reiterated the need for structural reforms to enhance competitiveness, particularly in Luxembourg's high-income economy. While acknowledging progress in AI and financial services, he emphasised that administrative simplification remains a key area for improvement.
According to Stéphanie Damgé, the Chamber's head of entrepreneurship, businesses expressed strong demand for three key changes in the survey: more centralised information and streamlined procedures, implementation of a "once-only" principle for document submissions, and greater tolerance for minor administrative errors without immediate penalties.
The Chamber of Commerce submitted a series of proposals to Minister of the Economy Lex Delles in November 2024, pledging to monitor progress. While some measures have already been implemented, others require legislative action.
"If we end up doing nothing, the economic toll could escalate", Thelen cautioned, underscoring the urgency of addressing regulatory and administrative barriers.
