POLITICS & INSTITUTIONS - ECONOMY

GDP

Slow-down in retail, hospitality in second quarter



The hospitality sector did well in the second quarter compared to last year but suffered compared to the start of 2021 Photo: Romain Gamba / Maison Moderne

The hospitality sector did well in the second quarter compared to last year but suffered compared to the start of 2021 Photo: Romain Gamba / Maison Moderne

Luxembourg’s economy bounced back from the pandemic lull last year in the second quarter of 2021, growing 11.8% compared to the same time in 2020, national statistics office Statec said on Thursday.

From April to June 2020, Luxembourg was still largely under lockdown, with schools only reopening towards the end of May together with restaurant terraces, with tables at the time limited to four guests.

The country’s economy has since then largely reopened under the CovidCheck regime, a certificate proving vaccine, recovery or test status. Compared to the second quarter of last year, the hospitality industry grew 20.9%, Statec said in a report.

But despite year-on-year growth, GDP shrank by 0.5% in the second quarter of 2021 compared to the first three months of the year. The main culprit was a 2.9% drop in activity in the retail, transport and hospitality sector.

Household spending was down 1.7% compared to the first quarter but up 14.6% compared to the same time last year.

Based on the latest data, Statec revised its GDP growth estimates upwards to +5.2% for the first quarter of 2021, from +4.9%. But the Luxembourg economy didn’t perform as well as anticipated at the end of last year, with Statec saying GDP grew just 0.8% in the last quarter of 2020, instead of +1.7%.