Luxembourg Chamber of Commerce unhappy with economic outlook

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The world is facing a complex of crises: geopolitical conflicts, demographic changes, climate challenges and growing protectionism. Luxembourg, with its open economy, is particularly sensitive to these changes. The head of the Chamber of Commerce, Carlo Tellen, notes that "the world is becoming more and more unstable, and this directly threatens our economic model".

Among the main concerns:

the protracted conflict in Ukraine,
rising tensions in the Middle East and the South China Sea,
political instability in the EU, exacerbated by populism,
demographic changes that jeopardise social protection systems.

Luxembourg's economy is expected to grow by 2.3-2.7 per cent in 2025, below the historical average of 3 per cent. Inflation is forecast at 2.6% and unemployment is expected to remain at 6%. To sustain long-term growth, the country will have to overcome a number of structural constraints, such as a housing deficit and a stagnant labour market.

Priorities for reforms

Innovation and performance

The Luxembourg Chamber of Commerce emphasises the importance of investing in artificial intelligence and technology. According to the 2024 Economic Barometer, 55% of companies that have innovated have seen an increase in productivity.

Simplification of bureaucracy

Administrative barriers remain a serious obstacle for business. In 2025, the Chamber of Commerce will submit concrete proposals to the government to simplify procedures.

Social reforms

Reforms to the pension system, sickness and maternity insurance are proposed for long-term sustainability.

Energy policy

In the transition to sustainable energy, it is important for Luxembourg to ensure access to competitive energy sources.

Defence and domestic economy

As part of its commitment to NATO, the country will increase defence spending to 2% of GDP by 2030. More than €1.4 billion annually is planned to be spent on developing the national economy.

Luxembourg's economy remains at risk, but a comprehensive approach to reform can transform challenges into opportunities. "This is the moment of truth for Luxembourg," emphasises Carlo Tellen. To ensure sustainable growth, the country needs to focus on innovation, economic diversification and social responsibility.

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