Luxembourg’s GDP has continued its oscillating pattern between growth and contraction over the past five quarters, with the latest quarter being the strongest among them. Photo: Kangkan Halder / Maison Moderne

Luxembourg’s GDP has continued its oscillating pattern between growth and contraction over the past five quarters, with the latest quarter being the strongest among them. Photo: Kangkan Halder / Maison Moderne

Luxembourg’s gross domestic product (GDP) experienced a quarter-over-quarter growth of 2.0% in the first quarter of 2023, according to Eurostat data released on 1 June. This positive growth marks a recovery from the contraction of -3.7% (revised) in the previous quarter, effectively avoiding a technical recession.

However, when compared to the corresponding quarters of the previous year, both the last two quarters still exhibit contraction, with rates of -2.2% and -0.4% respectively, Eurostat, the EU’s statistics agency reported.

In terms of seasonally and calendar-adjusted gross value added, Luxembourg experienced a net growth in output of 4.1% during Q1 2023. Notably, the information and communication sector saw a remarkable growth of 38.4%.

Conversely, there was a decline of 2.5% in the output value of the agriculture, forestry and fishing sector, as well as a 2.0% decrease in the wholesale and retail trade, transport, accommodation and food service activities sectors.

Wages

Compensation of employees across all economic sectors experienced growth, reaching its highest rate since Q1 2021, with a significant increase of 4.0% in Q1 2023.

The wholesale and retail trade, transport, accommodation and food service activities sector witnessed the most substantial rise in wages and salaries, averaging 9% compared to the previous quarter.

Conversely, professionals in the real estate sector observed the lowest increase, averaging 1.3%.

Consumption

The final consumption expenditure of households experienced a positive rebound, reaching 1.9%, following a contraction of -0.8% witnessed in Q4 2022.

In terms of specific categories, the consumption of durable, semi-durable and non-durable goods, seasonally and calendar adjusted, showed significant increases of 3.3%, 2.8% and 3.7% respectively, compared to the previous quarter.

Furthermore, household consumption by the value of services also saw a notable increase of 3.3%.

Trade

In terms of trade, the trend for exports and imports of goods and services reversed compared to Q4 2022.

In Q1 2023, the exports of goods and services exhibited a positive growth of 0.9% compared to the previous quarter’s decline of -1.3%.

Conversely, the imports of goods and services turned negative, showing a contraction of -0.1% compared to the previous quarter’s growth of 0.4%. Notably, the imports of goods and services from the European Union experienced a marked decline, reaching -0.6%, Eurostat data showed.

Luxembourg’s statistics agency Statec will publish quarterly GDP figures on Thursday 8 June, which could include revised data.

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