{
  "title": "Luxembourg: 2024 Article IV Consultation-Press Release; and Staff Report; and Statement by the Executive Director for Luxembourg",
  "publication": "IMF Staff Country Reports, June 7, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/06/07/luxembourg-2024-article-iv-consultation-press-release-and-staff-report-and-statement-by-the-549930",
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  "summary": "The 2024 Article IV Consultation discusses that Luxembourg’ economy contracted in 2023 despite buoyant consumption, mainly due to weak external demand and residential investment. Inflation is subsiding but underlying measures remain high.",
  "sections": [
    {
      "heading": "Economic performance and recent developments",
      "content": "- Luxembourg’s economy contracted in 2023 despite buoyant consumption, mainly due to weak external demand and residential investment.\n- Credit growth turned negative as demand dropped and real estate prices declined.\n- The newly elected government has approved a mix of temporary and permanent measures to support purchasing power and housing demand."
    },
    {
      "heading": "Inflation, financial conditions, and short-term outlook",
      "content": "- Inflation is subsiding but underlying measures remain high.\n- Gradually easing financial conditions, continuing disinflation and expansionary fiscal policy are expected to help the economy rebound and the financial cycle bottom out.\n- Inflation should decline in 2024, before temporarily increasing in 2025 once administrative price measures expire."
    },
    {
      "heading": "Risks and vulnerability assessment",
      "content": "- The recovery is fragile amid heightened geopolitical tensions.\n- Risks are tilted to the downside, stemming mainly from:\n  - external demand/supply shocks, and\n  - a disorderly correction of asset prices, including domestic real estate valuations."
    },
    {
      "heading": "Structural challenges and policy recommendations",
      "content": "- Sustained economic growth hinges on raising productivity, which has been stagnant since the Global Financial Crisis.\n- Key policy priorities to harness productivity gains and bolster competitiveness:\n  - Increasing investment in intangible assets.\n  - Aligning workers’ skills with the current demands of the economy.\n  - Reducing administrative burden.\n  - Making the wage indexation system more flexible.\n\n---\n\n Content in this bundle\n\n- 1luxea2024001\n  - 1luxea2024001 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1luxea2024001 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 7, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400277894.002",
    "Luxembourg’s economy contracted in 2023 despite buoyant consumption, mainly due to weak external demand and residential investment.",
    "Credit growth turned negative as demand dropped and real estate prices declined.",
    "The newly elected government has approved a mix of temporary and permanent measures to support purchasing power and housing demand.",
    "Inflation is subsiding but underlying measures remain high.",
    "Gradually easing financial conditions, continuing disinflation and expansionary fiscal policy are expected to help the economy rebound and the financial cycle bottom out.",
    "Inflation should decline in 2024, before temporarily increasing in 2025 once administrative price measures expire.",
    "The recovery is fragile amid heightened geopolitical tensions.",
    "Risks are tilted to the downside, stemming mainly from:",
    "Sustained economic growth hinges on raising productivity, which has been stagnant since the Global Financial Crisis.",
    "Key policy priorities to harness productivity gains and bolster competitiveness:",
    "**1luxea2024001**"
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