At 23% of GDP in 2017, the agency stated that Luxembourg had the lowest level of public debt of any triple A rated country. Fitch cited the country’s forecast rosy future, with estimated 3.5% growth in 2018, up from 2.3% in 2017, a level which it expects to stabilise around 3% over the medium term.
“This is a level above the median of the highest rated countries, which is 2.1%,” the agency wrote in its report.
It further stressed the high solvency ratio of the banking sector (Tier 1) of 24.6% in the first quarter of 2018 and low level of non-productive loans of 0.9%.
Like any country, Luxembourg is sensitive to global risks, particularly because of its “ultra-openness”, with Fitch citing Brexit trade negotiations and protectionist measures as the main risks to Luxembourg.
Agencies DBRS and Standard & Poor’s also issued “AAA” ratings.
“This report highlights Luxembourg's competitive advantages compared to other top-rated countries. It thus underlines the relevance of the government's budgetary and economic policy,” finance minister Pierre Gramegna (DP) said in a statement. “Political, economic and social stability, combined with a robust institutional and financial framework, creates a favourable environment for investors and entrepreneurs to contribute to the wealth of the country and its citizens.”