A mild recession in 2023

AA1

LOW RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Updated in October 2022.

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GDP USD87bn (World ranking 67, World Bank 2021)
Population 0.6mn (World ranking 166, World Bank 2021)
Form of state Constitutional Monarchy 
Head of government Xavier BETTEL (Democratic Party, Coalition) 
Next elections 2023, Legislative
  • Strong financial hub with a solid banking system and the second largest investment fund industry in the world
  • Business-friendly environment with transparent and robust institutions and modern infrastructure, facilitating easy access for FDI
  • Competitive tax regime favorable for foreign investors and the financial sector
  • Strong reputation as a sophisticated financial regulator state
  • Very low public debt and fiscal balance in surplus
  • High productivity levels and a well-educated, multilingual workforce
  • Potential vulnerabilities considering the structure of the financial system and the high dependency of the economy on the banking sector
  • Highest corporate debt stock in the Eurozone (320% of GDP)
  • Small open economy (export and import volumes are twice the size of GDP)
  • Intense dependence on cross-border workers and high cost of labor
  • Substantial room for improvement regarding access to post-secondary education

Trade structure by destination/origin

(% of total, 2021)

Exports Rank Imports
Germany 24.2%
1
26.1% Germany
France 15.9%
2
25.7% Belgium
Belgium 6.8%
3
6.1% France
Netherlands 6.8%
4
6.8% Netherlands
Italy 4.3%
5
4.3% United States

Trade structure by product

(% of total, 2021)

Exports Rank Imports
Iron and steel 17.1%
1
12.0% Road vehicles
Road vehicles 7.0%
2
6.0% Petroleum, petroleum products and related materials
Non-ferrous metals 6.2%
3
5.0% Metalliferous ores and metal scrap
Other industrial machinery and parts 6.2%
4
3.7% Electrical machinery, apparatus and appliances, n.e.s.
Miscellaneous manufactured articles, n.e.s. 5.3%
5
3.6% Miscellaneous manufactured articles, n.e.s.
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