Luxembourg’s economy was just picking up, then Trump came

The Luxembourg economy is on the right track. « The real GDP Luxembourg rose by 1.4 percent in the fourth quarter of 2024 compared to the previous quarter. This increase is primarily due to the results of the financial sector and industry, » said the Statistics Office Statec on Tuesday in its most recent « conjoncture flash ». Inflation has also declined further. In February it was 1.7 percent in Luxembourg, after 1.9 percent in January.

According to Statec, the real estate market is also gradually gaining driving. The falling inflation has led to a decline in the loan interest. « The increase in lending for residential properties in Luxembourg in spring 2024 is increasing, » says the « conjoncture flash ». The number of transactions could continue to increase in the future, the number of consumers who are interested in buying a property has risen steadily since mid -2024. Nevertheless, Luxembourg could be affected by a general slowdown in trade.

Since taking office, Donald Trump has announced numerous reforms, some of which have already been implemented. The most important change in the economic area is the increase in US tariffs, especially compared to China, Canada and Mexico, but also towards Europe and the rest of the world. « Luxembourg’s goods exports to the United States are relatively low, » writes the Statec.

The United States suffers the most from the import of imports

« Numerous simulations and studies on the effects of these measures were carried out, » the statistics office continues. The conclusions are similar: such measures strain world trade, economic activity and increase inflation pressure. In addition to China, Mexico and Canada, the United States would suffer most from the economic consequences of new customs policy. Europe would be less affected.

Due to the emerging trade conflict, the OECD predicts an unfavorable general economic climate: « Global GDP growth should slow down from 3.2 percent in 2024 to 3.1 percent in 2025 ».