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Fitch awards Luxembourg AAA rating

Published Wednesday September 29 2021

The rating agency Fitch has once again confirmed the AAA rating of Luxembourg citing a stable outlook and also confirming the country’s strong financial situation based on a balanced budgetary approach.

Fitch attributes Luxembourg’s AAA rating to the country’s resilience to the shock of the COVID-19 pandemic. Luxembourg’s economic structure and its relatively low proportion of “in contact services”, as well as the broad support provided by the government to businesses and households impacted by restrictions, made it possible for the country to overcome the crisis with a strong economic performance.

Luxembourg’s real GDP had already returned to pre-pandemic levels in the fourth quarter of 2020, and Fitch foresees a GDP growth of 4.6% in 2021, 3% in 2022 and 2.3% in 2023.

The agency also predicts that the government deficit will fall to -2.3% of GDP in 2021 and be no more than -0.8% two years later.

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