Economic outlook

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The observation on the economic situation is based on two pillars, namely an analysis of the short-term economic indicators and modelling. The analysis of the short-term economic indicators is drawn up from a very extensive database: activity surveys in the different branches, opinion polls (entrepreneurs, consumers), quarterly national economic accounts, balance of payments, prices and wages, labour market (employment and unemployment statistics) and public finances. This analysis aims to identify the main underlying trends to these indicators and to make a diagnosis - a qualitative judgement - on their performance from an economic viewpoint. This diagnosis relates to recent changes and also to the changes expected in the short-term and it is set according to the performances of other countries, which means that the economic situation has to be monitored internationally.

The modelling endeavours to formalise the behaviour of different economic variables in a macro-economic context with the help of econometric techniques. The purpose of the modelling is two-fold. On the one hand, it is used to understand the way in which the Luxembourg economy works or, in other words, to describe the interactions between the different economic variables (GDP, employment, unemployment, prices, wages, etc.). On the other hand, it is used to forecast changes in these variables. One of the most important points of the forecasting exercise, in the eyes of the general public in particular, is predicting the change in the Gross Domestic Product (GDP), i.e. the economic growth. These forecasts constitute a tool, or a benchmark, for making economic policy decisions (such as drawing up the State's budget) and for businesses' plans (such as investments in capital or labour).

The indicators in the tables below are drawn up in accordance with different concepts. Please read the explanations and definitions carefully by clicking on the i in the descriptions.

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