The OECD in a May economic forecast said Luxembourg’s economy is projected to expand by 4.8% in 2021 and by 2.8% in 2022. Unemployment is expected to grow as job retention schemes and covid-19 support run out, with the OECD recommending Luxembourg extend some of its programmes.

Luxembourg’s public finances have been bouncing back over the past months, with a deficit of central government spending largely absorbed as tax revenue increased. Gramegna (DP) in May said the recovery signalled a “gradual return to normal.”

And during an OECD meeting on 31 May and 1 June, he showed himself optimistic about economic growth. “All countries recorded a sharp decline in their growth in 2020, which was -6% in Europe. If the vaccination campaigns continue to accelerate, during the year 2021 we will have much stronger growth than expected,” the finance minister said.

“In Europe, growth rates won’t always be able to make up for lost time. But Luxembourg, which saw a decline of only -1.3%, will reach in the coming days, the coming weeks, the GDP from before the crisis,” Gramega said.

Gramegna was in Paris together with prime minister Xavier Bettel (DP) to attend the meeting of the OECD council, which was chaired by the US, with Luxembourg and South Korea co-chairs of the gathering. The meeting saw Mathias Cormann appointed OECD secretary general, following Angel Gurría.

Bettel presented Gurría with the order of merit of the grand duchy of Luxembourg, with the outgoing OECD secretary general awarded the grand officer insignia by Grand Duke Henri.

With the US chairing the council of ministerial level, discussions around a global minimum corporate tax could proceed apace. The second half of the ministerial council meeting is scheduled for October this year.

Discussions around digital taxation are also still ongoing, with both issues forming part of the OECD’s action plan on base erosion and profit shifting.