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How Luxembourg Keeps Its Triple A Rating



Luxembourg is one of the few countries in the world that enjoys a triple A rating from all major credit rating agencies. This means that it has the highest possible creditworthiness and can borrow money at very low interest rates. But what are the factors behind Luxembourg's exceptional rating and how does it cope with the challenges of the global economy?




Luxembourg has consistently maintained its triple A rating from Fitch, Standard & Poor's, Moody's, DBRS Morningstar and Scope Ratings for many years. The latest confirmation came from Scope Ratings in January 2023, which praised Luxembourg's resilient economy and stable outlook. It forecasted a GDP growth of 2.2% in 2023, higher than the euro area average.


The rating agencies highlight several strengths that support Luxembourg's rating, such as:


  • A diversified and competitive economy, with a strong presence of high-value-added sectors, such as financial services, ICT, biotechnology and space.

  • A sound public finance management, with low public debt (below 30% of GDP), moderate fiscal deficits and ample fiscal buffers.

  • A robust institutional framework, with effective governance, rule of law and regulatory oversight.

  • A high level of social cohesion and political stability, with broad consensus on key policy issues and strong social dialogue.

  • A favorable external position, with a large current account surplus, a positive net international investment position and a high degree of openness and integration with the European Union.


Of course, Luxembourg is not immune to the risks and uncertainties that affect the global economy, such as the Covid-19 pandemic, the energy price shock, the monetary policy normalization by the European Central Bank or the weaker than expected growth in its main trading partners. However, the rating agencies acknowledge that Luxembourg has shown remarkable resilience and adaptability in facing these challenges, thanks to its prudent economic policy and its diversified economic structure.


Luxembourg's triple A rating is not only a source of pride for its citizens, but also a valuable asset for its economy. It allows it to access international capital markets at very favorable conditions, which lowers its borrowing costs and supports its public investment. It also enhances its attractiveness for foreign investors and businesses, which contributes to its economic dynamism and job creation.


Luxembourg's triple A rating is not a given, but rather a result of hard work and sound policy choices. It requires constant vigilance and commitment to preserve it in a changing and competitive world. Luxembourg can be confident in its ability to do so, as it has proven time and again its capacity to innovate and overcome difficulties.


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