Let’s check out how Luxembourg and how its economy and its jobs scene fared from 2020 and how it’s going in 2021. We will also look at the forecasts for 2022. This will help you make a decision regarding your decision to work overseas in Luxembourg.
Luxembourg’s economy has a fiscal system and has international openness of a high degree. The country is very vulnerable to global financial events. This was evident when the country’s GDP dipped largely in 2020 owing to the COVID-19. However, in the same period, the external sector of the country has performed well enough in comparison. This was due to the trade in financial services.
In 2020, the country’s GDP growth was -5.8%. In 2021, the GDP is expected to rebound to touch a level of 5.9%. In 2022, the country’s GDP is expected to reach 3.8%.
In GDP per capita terms, Luxembourg is the third wealthiest country in the world. In the Eurozone, it has among the highest surpluses in current accounts as a share of GDP. The country generally maintains a robust budgetary position. But in 2020, the steps taken to tackle the COVID-19 pandemic along with a decrease in revenues led the governmental balance to fall into a state of deficit of 5.3% of GDP. In 2021, it’s expected to slow down to –1.1%.
Luxembourg has one of the lowest levels of public debt in the region. In 2020, public debt increased to 26.9% as per IMF. It’s expected to touch 27.5% in 2021 and 28.3% in 2022.
In 2020, there was a slow-down in the inflation rate of 0.4%. The reasons behind this were the dip in the prices of oil and the introduction of free public transport. The situation is expected to rebound in 2021 to 1.4%.
The COVID-19 led to the rise in unemployment that reached 6.5% in 2020. The problems of an aging population. In 2021, it’s expected that there will be an increase in unemployment leading to 7%.
The agricultural sector is next to non-existent in the country. It employs only around 1% of the country’s working population. It contributes just 0.2% to GDP. The government issued a stimulus package of €5 million to revive the sector from the crisis of COVID-19. However, the overall output in agriculture in the country decreased by 1.6% in 2020.
The industrial sector employs 12% of the country’s active population. The sector represents 11.3% of the country’s GDP. The most important industries are the manufacture of iron and steel. But in 2021, the sector has spread out into other areas like chemicals, light engineering, and plastic products.
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