Luxembourg finance minister Pierre Gramegna said positive trends in the country’s fiscal position would help push public debt down further Jessica Theis/Archives

Luxembourg finance minister Pierre Gramegna said positive trends in the country’s fiscal position would help push public debt down further Jessica Theis/Archives

Luxembourg’s debt to GDP ratio reached 23% at the end of the fourth quarter of 2017, according to Eurostat figures (pdf) published on Tuesday. This made it the second-lowest in the EU after Estonia (9%), while the member state with the highest ratio was Greece (178.6%). However, unlike 26 European countries, the grand duchy recorded a 2.2% increase in its debt to GDP ratio compared to the same period in 2016, the highest increase of any of the countries.

2022 projections

On Tuesday, Luxembourg finance minister Pierre Gramegna said that the central administration closed the 2017 financial year with a “situation much more advantageous than expected in the budget voted for 2017”. The deficit had been projected for €1,039 million, but finally came in at just €220 million.

“This result is all the more remarkable as 2017 was marked by the implementation of the tax reform, the gradual disappearance of VAT revenues on e-commerce, and the implementation of reforms of the voucher scheme for childcare and parental leave, as well as public investments rising to record levels.”

Gramegna said positive trends in the country’s fiscal position would help push public debt down further. Indeed, he said that a shift in policy had started a gradual decline and expected public debt to drop to 18.8% of GDP in 2022.