On Friday 28 September 2018, the rating agency Fitch confirmed the AAA Luxembourg with stable outlook.
Of all the countries benefiting from a triple-A rating, Luxembourg has the lowest level of public debt, with 23% of GDP in 2017.
During the period 2015 to 2017, the balance of the Public Administration posted on average a surplus of 1.5% of GDP. Under these conditions, Fitch estimates that the structural balance will follow an adequate trajectory, allowing Luxembourg to continue to respect its Medium Term Objective (OMT).
The economic growth of Luxembourg, which was 2.3% in 2017, is estimated to be 3.5% in 2018. According to Fitch, growth should stabilize around 3% over a medium term horizon. This is a level above the median of the highest-rated countries at 2.1%.
The agency estimates that Luxembourg's productivity will increase, particularly in view of the structural solidity of the economy and the comparative advantages of the country. Fitch also stresses that the financial sector remains resilient and growth and employment. The soundness of the banking sector is reflected in particular by a high solvency ratio (Tier 1) of 24.6% in the first quarter of 2018 and a low level of non-performing loans of 0.9%.
Regarding vulnerabilities, the agency believes that they are mostly related to global risks such as disorderly trade negotiations under Brexit and protectionist measures by major world economies.
Finance Minister Pierre Gramegna commented: "After DBRS and Standard & Poor's, Fitch reconfirms the AAA in Luxembourg, with a stable outlook. This report highlights Luxembourg's competitive strengths compared to other top-rated countries. He underlines the relevance of this government's fiscal and economic policy. Political, economic and social stability, combined with a robust institutional and financial framework, create a fertile ground for investors and entrepreneurs, who contribute to the wealth of the country and its citizens."
