Luxembourg: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Luxembourg PDF Download

Author: International Monetary
Publisher: International Monetary Fund
ISBN: 1513572997
Category : Business & Economics
Languages : en
Pages : 79

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Book Description
The economic impact of the pandemic has been much milder than initially foreseen, still the outlook remains challenging. The economy, dominated by financial services, adapted quickly to telework and benefited from unprecedented policy support, both domestically and globally. Uncertainty is unusually high, dominated by the virus dynamics in the short term, with downside risks relating to a sharp rise in global risk premia, deglobalization trends, and changes in international taxation.

Author: International Monetary
Publisher: International Monetary Fund
ISBN:
Category :
Languages : en
Pages : 78

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Book Description
Growth and employment have slowed somewhat, reflecting mostly weaker external demand, tighter financial conditions, and confidence effects. A large fiscal support package in the run up to the election has alleviated the impact of the energy shock on consumers and firms, with energy price controls limiting the pass-through to inflation and hence wage increases in a context of automatic wage indexation.

Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 1498314511
Category : Business & Economics
Languages : en
Pages : 67

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Book Description
This 2019 Article IV Consultation discusses that Luxembourg’s growth prospects remain favorable, but downside risks arise from a weaker-than-expected global growth, a disorderly Brexit, changes in international tax rules, and a sharp tightening of global financial conditions. Domestically, rising real estate prices could exacerbate already elevated household indebtedness and increase affordability challenges. Fiscal policy should aim to maintain a strong fiscal position and preserve buffers. The government’s plans, while appropriate, will result in a slightly expansionary budget in 2019. The cost and timeline of the planned measures over the medium term remain to be determined. Given risks ahead, including from potential changes in international taxation, Luxembourg should build on its strong fiscal record and preserve sizeable buffers. Structural policies should focus on addressing key gaps in the economy. Further reforms of the pension system are needed to ensure its sustainability, while considering intergenerational equity and trade-offs of various reform options.

Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1455207268
Category : Business & Economics
Languages : en
Pages : 41

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Book Description
The staff report for the 2010 Article IV Consultation underlies a thorough and objective view of the macroeconomic situation in Luxembourg and the challenges the economy is facing. The country’s enviable position of public finances at the onset of the crisis provided the space to accommodate fiscal support to the economy, enhance social transfers, and protect household income. Executive Directors recommended a sharper focus on liquidity and credit risks arising from banks’ sizable and concentrated exposures to their foreign parent groups.

Author: International Monetary
Publisher: International Monetary Fund
ISBN: 151357308X
Category : Business & Economics
Languages : en
Pages : 83

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Book Description
The pandemic dealt a severe blow to the Italian people and their economy. GDP fell by nearly 9 percent in 2020, with much larger drops for contact-intensive services. Public and corporate debt increased strongly and preexisting vulnerabilities have likely worsened. The government is prioritizing resolving the health emergency and transforming the economy to lift productivity, improve social outcomes and strengthen resilience to future shocks and structural change. The large National Recovery and Resilience Plan—partly financed by sizable Next Generation EU resources—will be used to increase physical and social infrastructure. Outlook. GDP is expected to recover strongly in 2021–22 and to grow well-above trend over the medium term, supported by investment spending. Nonetheless, economic scarring could be sizable. The two-sided risks relate to how the pandemic progresses, the efficiency of investment spending and the extent of savings drawdown, with large costs associated with the downside.

Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 1484349962
Category : Business & Economics
Languages : en
Pages : 61

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Book Description
This 2018 Article IV Consultation highlights that the economic growth in Luxembourg reached 2.3 percent in 2017, above the European Union average, and was driven by net exports of financial services and private consumption. Growth is projected at 3.5 percent for 2018, with continued strong job creation, and a temporary slowdown in inflation. In 2017, buoyant corporate tax revenues contributed to a fiscal surplus of 1.4 percent of GDP. The full impact of 2016 tax reform, and a continued need for high public investment are expected to result in a small fiscal surplus over the medium-term.

Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 1475599471
Category : Business & Economics
Languages : en
Pages : 61

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Book Description
This 2017 Article IV Consultation highlights Luxembourg’s strong growth supported by the competitive advantages of fiscal stability, a qualified workforce, and business-friendly regulations and oversight. Economic growth reached 4.2 percent in 2016, well above the EU, and was driven by net exports of financial services. Growth is projected at 3.8 percent in 2017, with continued strong job creation and a pickup in inflation. Growth prospects are good but subject to downside risks, including a retreat from cross-border integration and policy uncertainty in the United States and related to Brexit and coming elections in Europe. These could result in financial market volatility affecting the financial system.

Author: International Monetary
Publisher: International Monetary Fund
ISBN: 1513573004
Category : Business & Economics
Languages : en
Pages : 62

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Book Description
The pandemic is inflicting much suffering, which has been met with swift, substantial, and well-coordinated policy responses. The anti-crisis measures have helped preserve jobs, provide liquidity to companies and income support to the vulnerable groups. They averted a larger decline in output and kept unemployment under control. After contracting by 5.5 percent in 2020, real GDP is projected to grow by 3.9 percent in 2021 and 4.5 percent in 2022, as vaccinations help achieve herd immunity. However, risks to the outlook are large and tilted to the downside, given the epidemiological situation.

Author: International Monetary
Publisher: International Monetary Fund
ISBN: 1513594435
Category : Business & Economics
Languages : en
Pages : 78

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Book Description
Germany’s economy contracted by just under 5 percent in 2020, outperforming most European peers. But renewed waves of infections and associated lockdowns caused economic activity to plunge again in the first quarter of this year. While the pace of mass vaccination has picked up and the economy has started to reopen, the recovery path is beset with risks, particularly with respect to the progress of the pandemic and supply shortages in major industries. The authorities have maintained appropriately accommodative fiscal and financial policies, and most measures supporting households and firms have been extended through 2021.

Author: International Monetary
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 62

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Book Description
Real GDP surpassed its pre-pandemic trend in early 2021, and the labor market is tight. Inflation is increasing, mainly driven by energy prices, but core inflation is also edging up. The fiscal position strengthened and the financial sector has remained resilient. Rapidly growing housing prices raise concerns about affordability and could pose risks for financial stability and the country’s attractiveness in the medium term. Following the outbreak of war in Ukraine, inflation pressures have intensified and financial market volatility has risen.