The National Institute of Statistics and Economic Studies (STATEC) released its economic forecasts for Luxembourg on Tuesday, offering insights into what the country can expect in 2026 and beyond. Below are three key takeaways from the report, as selected by our colleagues from RTL Infos.
As previously indicated, the next automatic wage indexation is now expected to arrive earlier than initially forecast. Originally anticipated for summer 2026, the 2.5% salary increase should now be applied in the spring.
According to STATEC, inflation is projected to reach 1.8% this year, which will trigger the indexation of salaries, pensions, and civil servants’ pay “in the second quarter of 2026" – meaning between April and June. The increase will be 2.5%, in line with the usual mechanism.
To calculate the effect of indexation on a salary, one simply multiplies their gross salary by 1.025. The result reflects the new gross salary once the adjustment is applied.
According to STATEC’s forecasts, several factors will help curb inflation in Luxembourg in 2026 and 2027. These include falling electricity, gas, and oil prices, as well as a strengthening of the euro. “In this context, energy prices are expected to fall by 6.3% in 2026 and 3.5% in 2027, contributing significantly to the slowdown in overall inflation,” the institute noted.
Conversely, food prices are expected to rise by 2.8% this year, while services are projected to become 2.2% more expensive. Over the medium term, however, overall inflation should “stabilise at around 2%.”
Having risen for several months, unemployment remains a challenge for Luxembourg. As of 31 January, the country counted 21,255 resident jobseekers, representing an unemployment rate of 6.3%. While all age groups are affected, the increase has been particularly pronounced among the most qualified individuals. The sectors under the most pressure – secretarial work, accountancy, and IT – reflect trends already observed in recent months.
Looking ahead, STATEC forecasts an improvement in the unemployment trend, driven by stronger economic growth. By 2029, the unemployment rate is expected to fall back to 5.2%.
