Sustainable Governance Indicators (SGI) 2022 - Luxembourg Country Analysis

The Grand Duchy is considered as the third most open economy in the world, with an openness rate of 158.2% of GDP. The country has an export-intensive economy, with a recurrent trade deficit. The share of foreign trade in Luxembourg’s GDP is currently higher then 30%. Even in the context of the Covid-19 crisis, the country is pursuing its strategy of public investments. Direct and indirect investments envisaged to reach 4.3% of GDP in 2021, a significantly higher cap than the average of 3.7% during the years 2015-2019.Luxembourg has a highly qualified workforce (59.6% of the active population). Over the past 12 month the overall employment growth rate was 1.6%, and that related to the cross-border workers was 2,2%. Two-thirds of jobs created in Luxembourg are aimed at higher education graduates.With an outstanding social security system, a level of material wellbeing above the EU average and sound public finances, Luxembourg is currently one of the most politically stable and prosperous countries in the world. Its strong fiscal position is well illustrated by a longstanding AAA credit rating, a significant accumulation of government financial assets, and a balanced, healthy fiscal position. The public administration, almost completely digitalised, is efficient and the overall economic outlook remains stable.