After DBRS, Moody's and Standard & Poors, Fitch is the last of the major rating agencies to publish this year's assessment of Luxembourg and to award it the highest possible rating.
In his analysis, Fitch highlights the beneficial effects of tax reform, both for the purchasing power of households and for the competitiveness of companies. The agency anticipates that Luxembourg's growth will continue to rise and that it will remain significantly above the average of the other "AAA" countries. In this regard, the continued growth of the financial sector remains the main growth driver. Fitch also believes that Brexit could benefit Luxembourg because of the possible transfer of new activities to the Grand Duchy.
In addition, the agency stresses that the level of indebtedness of Luxembourg, which it currently evaluates at 20.6%, will remain in the years to come among the lowest of the countries with a "AAA" rating.
At the level of risk, which the agency believes are generally limited, Fitch cites in particular the long-term financing of the pension system and a possible slowdown in world trade due to international protectionist trends.
Pierre Gramegna, Luxembourg's Minister of Finance, commented "This fourth confirmation in three months of the AAA confirms the good performance of public finances and the economy in general. The policies implemented by the government are bearing fruit and making it possible to look to the future with optimism. According to the Agency's estimates, the labour market and wages will continue to grow, further stimulating domestic demand. However, Fitch's analysis also shows that continued efforts are needed to maintain this trend in the years to come."
