Luxembourg's balance of payments: persistent surpluses and large capital flows

According to the Bank of Luxembourg (BCL) and the statistical office STATEC, the country's current account surplus totalled 883 million euros in the first quarter of 2025, an increase of 316 million compared to the same period last year. This dynamic demonstrates the good resilience of Luxembourg's foreign trade, despite mixed performance in some components.

The balance of foreign trade in goods still remains negative: -184 million euros, but this is better than last year's value thanks to the decrease in both exports (-2%) and imports (-3%). However, the picture is not uniform:

• Exports in the category of international trade without passing through Luxembourg territory (so-called "négoce") rose by €1.08 billion,
• while ordinary exports (physical deliveries from Luxembourg) fell by €1.23bn (-19%).

On the other hand, there is a clear positive trend in the services sector: the balance of foreign trade in services increased by 18% compared to 2024 and reached 1.27 billion euros. The reason for this is the moderate growth in exports (+1.8%) and the decline in imports (-1.9%). The financial services sector performed particularly well, with exports growing by 4.7% and imports by 5.9%, due to a 9% year-on-year increase in assets under management of investment funds.

Against these figures, the investment account looks more stressed:

• Direct investment showed significant outflows in terms of both assets (-€27bn) and liabilities (-€33.4bn), of which half related to capital transactions.
• In contrast, portfolio investment in Luxembourg equities recorded record inflows: €88.7bn (against €20.6bn in 2024).

At the same time, capital withdrawal from foreign equities continues (-€21.8bn), as a year ago. However, foreign debt instruments are in demand - net purchases totalled €87.1bn. Luxembourg debt securities also attracted €15.4bn of capital investment, 4 times more than in the first quarter of 2024.

Thus, despite the decline in physical supply, Luxembourg continues to maintain a strong position due to its financial sector and growing interest in the stock market. Investment dynamics confirm the country's role as a key centre of global capital in Europe.