On Friday 9 March, the rating agency DBRS confirmed the continuation of the "AAA" rating of the Grand Duchy of Luxembourg with a stable outlook.
In its analysis, the agency highlights Luxembourg's favourable economic outlook. With 3.4% real GDP growth in 2017, it exceeded the average of the euro zone and is expected to reach a rate higher than 4% in 2018. Public finances remain healthy, this despite tax reform and the level of high investment maintained in the state budget for the year 2018. The agency confirms the low level of public debt of 22.9% for 2017, thus far below the government target of 30%.
DBRS also emphasizes that Luxembourg remains a preferred destination for investment. The Luxembourg financial center, which can rely on a highly qualified workforce, a competitive tax and regulatory framework and strong institutions, contributes to the attractiveness of the Grand Duchy and makes it an ideal home for multinational companies. Also, the agency believes that Luxembourg is well placed to benefit, regarding Brexit, the relocation of financial institutions to the Grand Duchy.
The agency also noted the potential risks associated with external shocks in the financial markets and the evolution of the international tax framework. However, the strong economic fundamentals of Luxembourg and the economic diversification efforts led by the Government will help mitigate these possible pressures. In general, DBRS considers that financial stability risks are limited.
Pierre Gramegna, Minister of Finance, commented "The maintenance of the highest rating for the Grand Duchy confirms, once again, that the policy pursued by this Government since taking office bears fruit. The government has durably rebalanced public finances, while conducting major reforms and keeping investment at a high level."
DBRS also emphasizes that Luxembourg remains a preferred destination for investment. The Luxembourg financial center, which can rely on a highly qualified workforce, a competitive tax and regulatory framework and strong institutions, contributes to the attractiveness of the Grand Duchy and makes it an ideal home for multinational companies. Also, the agency believes that Luxembourg is well placed to benefit, regarding Brexit, the relocation of financial institutions to the Grand Duchy.
The agency also noted the potential risks associated with external shocks in the financial markets and the evolution of the international tax framework. However, the strong economic fundamentals of Luxembourg and the economic diversification efforts led by the Government will help mitigate these possible pressures. In general, DBRS considers that financial stability risks are limited.
Pierre Gramegna, Minister of Finance, commented "The maintenance of the highest rating for the Grand Duchy confirms, once again, that the policy pursued by this Government since taking office bears fruit. The government has durably rebalanced public finances, while conducting major reforms and keeping investment at a high level."
