The rating agency Scope Ratings has just confirmed on Friday the "AAA" credit rating of the Grand Duchy of Luxembourg with a stable outlook. This higher rating reflects the country's resilient economy, as well as the good performance of public finances.
Scope notes that government measures, implemented in a determined manner, have enabled Luxembourg to resist successive crises comparatively better than its neighbouring countries. By way of illustration, the agency considers that the "Energiedësch" measures, respectively "Solidaritéitspak 1.0 and 2.0 " have a positive impact on purchasing power, private consumption and investment levels. The agency notes that inflation is on a downward trend.
Despite the economic slowdown in Europe caused by the war in Ukraine, Scope forecasts GDP growth in Luxembourg of 2.2% for 2023, compared with 2.0% in 2022. On the labour market, job creation in Luxembourg remains at a high level, in the face of a slowdown in the rest of the European Union. With regard to the financial centre, the agency notes that the regulatory framework and effective supervision are features that explain its resilience and competitiveness.
At the same time, the report highlights a number of risks to which Luxembourg is exposed as an open economy, such as a possible rise in energy prices, the evolution of the European Central Bank's monetary policy or lower than expected growth.
The rating agency highlights the soundness of Luxembourg's public finances and believes that the level of public debt will not exceed the 30% of GDP threshold set in the government programme. According to Scope's analysis, the evolution of the budgetary situation provides some room for manoeuvre to face possible economic challenges.
The Minister of Finance Yuriko Backes commented: "Scope's affirmation of the 'AAA' rating is testament to the government's responsible fiscal policy. The evaluation highlights the effectiveness of the packages of measures, implemented by the government in close consultation with the social partners, to support households and businesses. I will continue to work to maintain sound public finances, which are the key to a resilient and prosperous economy.".
Press release by the Ministry of Finance