The Luxembourg Trade & Invest website frequently features articles on how Luxembourg performs in international rankings published by independent organisations. While each benchmark focuses on a specific topic, they provide a more comprehensive picture of the country when combined together.

Ability to safeguard the economy in crisis

A first characteristic that stands out is Luxembourg’s stable economy that is resilient to external shocks. It is constantly AAA rated by credit rating agencies Moody’s, Fitch and Standard & Poor, due to its economic resilience, solid public finances, and robust and transparent institutional framework. When Moody’s introduced environmental, social and governance (ESG) aspects in its assessment methodology, the agency pointed out that Luxembourg has a low exposure to environmental and social risks, high governance performance and a very high capacity to respond to shocks.

Luxembourg also ranked 3rd most resilient economy in the world in the 2021 FM Global Resilience Index. “This report, and several others, highlight how Luxembourg’s healthy economy and institutional stability have helped the country successfully weather the economic crisis triggered by the coronavirus pandemic,” says Lena Mårtensson, Senior Marketing & Communication Manager at Luxinnovation and the main content writer for Luxembourg Trade & Invest. “The strong financial position at the outset of the crisis meant that in spite of the massive support to keep the economy going, and all the investments done in healthcare, Luxembourg still has the 2nd lowest government debt rate in the EU.”

The Luxembourg government is also very pro-business.

“Luxembourg is one of only 4 or 5 AAA-rated countries in the EU. This creditworthiness leaves a margin that can be used for other activities to stimulate the economy,” comments Jenny Hällen Hedberg, who heads Luxinnovation’s International Business Development team. “Small, medium-sized and large companies have better long-term development and growth perspectives in AAA-rated countries. The Luxembourg government is also very pro-business, and there is a plethora of incentives oriented towards business expansion, for example through cooperation with research organisations.”

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