Written by 4:21 pm Europe Economy

RTL Today – Economic Outlook for 2023: “I’m worried about the future of the country”, says head of Chamber of Commerce

Luxembourg’s economy grew by just 1% in 2022, significantly below its typical growth rate of 3 to 4%.

“This is the growth rate that we need to fund our welfare state and maintain our Luxembourgish social model,” according to Carlo Thelen, director of the Chamber of Commerce. Thelen says that because of this, he is worried “about the future of the country.”

The main factor impacting the economy is expected to be the ongoing conflict in Ukraine, according to Thelen.

The National Institute of Statistics and Economic Studies (STATEC) projects that Luxembourg’s economy will grow by 1.5% in 2023.

Inflation remains a concern, with the European Central Bank predicting a rate of 6.3% for the Eurozone and 3.4% for Luxembourg in the last quarter of 2023.

High energy prices are a major contributor to inflation, and businesses in energy-intensive sectors, such as the industrial sector, are particularly affected.

The construction sector is also struggling due to a decrease in demand for new projects and the impact of rising interest rates. The service sector, which plays a key role in Luxembourg’s economy, has generally been less affected.

Despite these challenges, Thelen highlights the resilience of Luxembourg’s businesses, citing the relatively low number of bankruptcies, which have only increased by 20% in Europe since the third quarter.

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