You will still have to wait before seeing your salary increase by 2.5% under the effect of automatic indexation. The new forecasts published this Friday by Statec in fact count on an upcoming readjustment of salaries in the 2nd quarter of 2025. The automatic indexation of salaries and pensions had previously been announced successively for the last quarter of 2024, then for the 1st quarter of 2025. ..
According to the statistics institute, Luxembourg inflation will be below 1% by the end of 2024, due in particular to low inflation in services. It should gradually strengthen over the course of 2025, under the effect of the easing of energy price capping measures. However, over the whole of 2025, inflation is expected to rise to 2.1%, very close to the 2% in 2024.
Statec indicates that growth was very moderate in 2024 (+0.5%), but that it should increase thereafter, with +2.5% expected in 2025 and +2.4% in 2026. Residential investment is expected to gradually recover in 2025 and 2026, in particular thanks to the fall in interest rates in the euro zone. Furthermore, the expected recovery in economic activity in the euro zone should support economic dynamics in the Grand Duchy thanks to stronger external demand. Household consumption should also improve against the backdrop of a slight decrease in savings.
However, these predictions must be taken with caution. Higher-than-expected key interest rates in the euro zone could disrupt the recovery expected for 2025. Conversely, a faster-than-expected decline in rates would add around a percentage point to growth forecast for next year .
The unemployment rate will not fall before 2026
In Luxembourg, employment continued to slow down and should only grow by 1% this year (after +2.2% in 2023), i.e. at a pace close to that anticipated for the euro zone. This growth represents a lowest point for Luxembourg since 2009, underlines Statec. The unemployment rate would rise to 5.7% of the active population this year and would further increase slightly to 5.9% in 2025, before returning to 5.7% in 2026 as a result of the strengthening of the labor market. , writes the statistics institute again.
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