STATEC Reports Continued Economic Recovery in Q2 2025

On Tuesday 23 September 2025, Luxembourg's national statistics institute, STATEC, published its latest Conjoncture Flash report showing that real GDP grew by 0.6% in Q2 2025 compared with the previous quarter.

STATEC noted that household consumption recovered slightly (with volume growth averaging 3.5% over 2023 and 2024, compared with only 1.5% previously), supported by higher spending on health services, catering and food, while expenditure on housing-related services and vehicle costs fell. Public consumption remained dynamic, progressing at a similar pace of the previous quarters.

According to the report, Gross fixed capital formation declined in Q2 2025, particularly in non-residential construction as well as aircraft and satellites, though investment in other transport equipment and machinery increased. Exports stagnated as gains in non-financial services were offset by declines in goods and financial services.

Value added to the economy rose by 0.3% in Q2 2025. This growth was mainly driven by information and communication services (+4.9%) and by non-market services such as public administration, education and health (+0.9%). Industry, real estate and business services also contributed positively. Construction and the trade, transport, accommodation and catering sector declined, largely due to weaker transport activity.

Alongside the Q2 results, STATEC published revised annual figures. GDP growth in 2023 has been revised upwards to +0.1%, compared with -0.7% previously. Growth in 2024 has been revised down to +0.4%, from +1.0% in earlier estimates.

STATEC reported that global coffee and cocoa prices rose sharply in 2024, peaking in early 2025 with increases of 150% for coffee and 330% for cocoa compared with early 2023. Prices then fell by around 25% between January and July 2025, though this drop has not yet been reflected in retail prices. Consumer prices for coffee and cocoa products, including chocolate, rose by about 20% year-on-year in the euro area and 10% in Luxembourg until August 2025. These items contributed 0.9 percentage points to food inflation in August in the euro area and 0.4 percentage points in Luxembourg.

The average labour cost per person in Luxembourg rose by 4.4% year-on-year in Q2 2025, up from 2.8% in the first quarter. This increase was mainly due to the May indexation, which accounted for 1.7 percentage points of the growth. Employer contributions and autonomous wage increases linked to collective agreements also added to the rise. In the euro area, average labour costs grew by 3.9% over the same period, with growth stabilising in France and Germany after a slowdown in 2024.

Luxembourg’s unemployment rate slipped to 5.9% in June 2025, after peaking at 6.0% in April and May. The strongest improvements were among jobseekers registered for less than four months, in construction and commerce and those with upper secondary education. However, employment slipped in August, following strong growth in July, but overall trends suggest a modest improvement. Early data show that employment grew by 0.4% in Q3 (first two months), compared with +0.2% in Q1 and +0.3% in Q2. Gains came mainly from administrative and support services, including temporary work. Construction employment continued to decline but at a slower pace.

Moreover, Greenhouse gas emissions in Luxembourg fell further in 2024 to below 6,800 kt, meeting the targets of the Climate Law. The drop was driven by a sharp fall in fuel sales and continued electrification of the vehicle fleet, with electric and hybrid cars now making up 23% of the national stock.