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Severe recession in 2020
25-06-2020 | STATEC

The containment measures put in place to limit the health consequences of the Covid-19 pandemic are having a heavy and rapid impact on the economy. Like many countries, Luxembourg will experience a deep recession this year, with deep impacts on the labour market and public finances. However, the employment measures taken by the government during lockdown should limit the negative effects on the workforce, with employment still expected to increase by 0.8% in 2020 in the scenario of limited lockdown, after +3.6% in 2019. The cyclical downturn will result in a clear deterioration in public finances. The public balance is expected to deteriorate sharply, from +2.2% of GDP in 2019 to -6% this year (i.e. -3.5 billion EUR). This would be an unprecedented deficit.