The state budget for 2023, which is currently under parliamentary discussion, is based on GDP growth of 2.5% for this year and 2% for the next.
On Monday, Serge Allegrezza, the director of the National Institute of Statistics and Economic Studies (STATEC), presented the economic situation and the institute’s latest economic forecasts to the MPs of the Finance and Budget Committee, as part of the preparations for the 2023 budget.
These forecasts are more conservative, predicting growth rates of 1 to 2% in both 2022 and 2023.
One of the risks mentioned by STATEC is that of a recession in the euro zone.
According to STATEC experts, the decisions taken in the framework of the tripartite agreement should nevertheless support the economy in Luxembourg.
One third of the measures are even expected to be self-sustaining. One example cited was short-time work, which is expected to stabilise the labour market, with a projected unemployment rate of 4.7% for 2022 and 4.9% for 2023.
The current uncertain economic situation is reflected in confidence indicators, the institute’s economic experts say, with consumer confidence being at its lowest level since surveys began.
For the time being, STATEC is unable to predict how consumers will react to the implementation of the anti-inflationary measures resulting from the agreement.