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Economy

Luxembourg features a stable, high-income economy with solid growth, low inflation and low unemployment rates.

For the past decades Luxembourg has been one of the world's most dynamic and strongest economies.

In 2008, Luxembourg ranked fifth most competitive country in the world according to the IMD World Competitiveness Scoreboard 2008. Luxembourg is the highest-ranked member of the European Union.

The healthy development of the Luxembourg economy has an impact on the neighboring countries: nearly one third of the country's workforce consists of cross-border commuters from France, Belgium and Germany.

Of the factors that influence growth and competitiveness the most in Luxembourg’s economy, it is the social context that makes the country a really attractive location. Social conflicts can usually be avoided thanks to the regular consultation between the social partners and the Government, known as the "Luxembourg Model". This is just one of the reasons why there have hardly been any strikes over the course of the last century!  One of Luxembourg’s exceptional features relates to its socio-cultural background reflected in the ease with which employers and decision-makers in politics and trade unions can meet. Of course, the manageable size of the country helps!

Key sectors

Finance

Luxembourg boasts one of the world's most important financial services industries, specializing in areas such as lending for international projects and trade finance, private banking services for all kinds of investors, from wealthy individuals to family business owners, life insurance and pension schemes for multinational companies and, increasingly, online banking and electronic commercial services. The financial sector accounts for about 28% of GDP.

The excellent financial network is characterized by the presence of more than 150 banks and other institutions from the financial sector, such as Clearstream, a member of Deutsche Börse Group, offering settlement and custody services for the financial sector worldwide.

With the rapid growth of areas such as investment funds - in which Luxembourg is second worldwide only to the United States, with 24% of European funds domiciled in Luxembourg - and other savings products, the financial sector now employs around 10 percent of the national workforce. It has also encouraged the development of a sophisticated services sector including lawyers, auditors and consultants.

ICT

High level telecommunications competences and a powerful infrastructure are essential to a service economy. The growing demands of companies and institutions require increasingly powerful telecommunications infrastructures.

The private and public players are continuously investing in a proactive manner to meet these demands and remain at the leading edge of progress.

Luxembourg is champion in broadband coverage, mobile communication penetration and Internet usage.

Media

Luxembourg has strong historic ties with the development of Europe’s media landscape. The release of radio broadcasting rights to the private sector in the 1930s, and television rights in the 1950s, paved the way for one of Europe’s leading media companies: RTL Group. Today, it is at the forefront of international broadcasting involved in over 45 European TV and radio channels.

In 1985, the Government passed on the rights to the use of its orbital positions for satellite transmission and awarded a commercial franchise to what became the world’s leading satellite company, SES Global, which is today providing satellite access to 95% of the world population.

Industry

The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products.

Companies that have opted to invest in the Grand Duchy many decades ago include Goodyear, DuPont de Nemours, Guardian and Sommer-Allibert.

The world's leading steel company Arcelor-Mittal is also headquartered in Luxembourg.