RTL Infos – Triple A: Luxembourg highly rated… but watch out for pensions

RTL Infos – Triple A: Luxembourg highly rated… but watch out for pensions
RTL Infos – Triple A: Luxembourg highly rated… but watch out for pensions

Fitch Ratings and Scope Ratings confirm Luxembourg’s best “AAA” rating with a stable outlook.

This Friday, May 24, 2024, the rating agencies Fitch Ratings and Scope Ratings confirmed the “AAA” rating of Luxembourg. Its economy has prospects “stable” say the agencies, which are widely followed in the economic world. With this “triple A”, they once again certify “the good financial situation of the country, thanks to solid economic fundamentals and prudent budgetary management of Luxembourg” rejoices the Ministry of Finance. It is this “AAA” which today allows the Luxembourg State to borrow on the markets with good rates.

Luxembourg has the particularity of having very little debt (25.7%%) while maintaining high income for its inhabitants. “Scope underlines in its rating the rich and high value-added economy, the solid financial situation as well as the robust external position of the country, factors which have contributed to Luxembourg’s economic resilience and its ability to cope with shocks” adds the ministry.

Both agencies estimate thatan economic recovery must happen “medium term”. Statec estimates that growth will reach 2% in 2024, after a low in 2023 (-1.1%).

However, Fitch Ratings and Scope Ratings emphasize “the challenge that fiscal pressures linked to aging will represent in the future”. Indeed, in the long term, Luxembourg has one fear: the surge in its pension expenses, until the reserve is exhausted within around twenty years. A wall that the government seeks to push back via a pension reform, currently being developed.

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