Eco&Stat n°2-23 - The impact of COVID-19 on Industrial Production in Luxembourg

In 2020, the COVID-19 pandemic led to a sharp drop in demand for service activities requiring intense interpersonal interactions. Against this background, this study evaluates for the first time total economic impacts from initial COVID-19 demand shocks for Luxembourg, a small open economy highly integrated in Global Value Chains (GVCs). The analysis is conducted at the industry level. More specifically, the study estimates the impact of the pandemic on Luxembourg’ industrial production focusing on inter-industry linkages and adopting an input-output approach. The study also depicts the economic structure of Luxembourg and its inter-dependencies with other foreign industries.