Economy

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned and have extensive foreign dealings. The economy depends on foreign and cross-border workers for about 60% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted 0.9% in 2008 and 3.9% in 2009. Nonetheless, the country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks third in the world, after Liechtenstein and Qatar, and is the highest in the EU. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009.


Currency

Euro

Main industries

banking and financial services, iron and steel, information technology, telecommunications, cargo transportation, food processing, chemicals, metal products, engineering, tires, glass, aluminum, tourism

GDP
$38.37 billion (2009 est.)
$39.93 billion (2008 est.)
$40.31 billion (2007 est.)
note: data are in 2009 US dollars

GDP growth rate

-3.9% (2009 est.)

-0.9% (2008 est.)
5.2% (2007 est.)

GDP per capita
$78,000 (2009 est.)3rd in the world
$82,200 (2008 est.)
$83,900 (2007 est.)
note: data are in 2009 US dollars



GDP by sector

agriculture: 0.4%
industry: 13.6%
services: 86% (2007 est.)



Labor Force
208,000 of whom 125,400 are foreign cross-border workers commuting primarily from France, Belgium, and Germany (2009 est.)

Labor Force by sector

agriculture: 2.2%
industry: 17.2%
services: 80.6% (2007 est.)


Unemployment Rate
6.8% (2009 est.)

4.4% (2008 est.)