Salaries in Luxembourg are increased 2.5% each time inflation increases by a certain threshold, also known as indexation
Forecasts for the next indexation salary increase in Luxembourg have been pushed back a quarter at the very earliest as the pandemic prompts plummeting oil prices.
According to figures published by Statec on 5 August, if oil prices do rebound at 1 USD from the central forecast, workers won’t receive an extra 2.5% in their paypackets until the last quarter of 2021. And that is the earliest forecast.
Based on low and central Brent crude oil price forecasts, the threshold to trigger an indexation won’t fall until 2022. It is a change from forecasts published in February this year expected the payrise to fall between the first and third quarters of 2021.
The cost per barrel of crude reached 40 USD at the beginning of August, up from under 20 USD in April 2020 but still well below the 64 USD recorded in 2019. It is expected to rise to an average of 50 USD in 2021.