The report concludes that the economy has declined by 4% over the course of the year. This means that the annual recession is less significant than was anticipated back in April, when experts expected a 6% decrease.
Statec thus notes that the Luxembourgish economy proved to be more resistant than those across the majority of European countries. Nevertheless, unemployment has been on the rise and will continue to climb in 2021.
The research institute further estimates that the economic relaunch will turn out to be less significant than previously anticipated, as the second wave of infections is still ongoing and causing more uncertainty. The expected 7% increase could therefore be reduced to 4%. An alternative scenario even projects the country to suffer from further decline.
While the government support measures for businesses suffering under restrictions are certainly considered helpful in counteracting a recession, they are beginning to take a toll on the state's financial stability, the Statec report finally notes.
