MFA: Strategic opportunities for foreign exporters
Luxembourg normally shows long-term stable GDP growth in the range of 3 to 5% per year, but the national statistical office expects a maximum growth of 1.5% in 2021, and 2.7% in 2022. Due to the specialization of the national economy in banking and telecommunications and high state support (more than EUR 10 billion so far, i.e. significantly more than during the crisis in 2008-2009), the inflation rate is basically stable despite the crisis (0.7%), as well as unemployment (6.4%).
Persistent problems are spiraling apartment prices (16-17% year-on-year), high youth unemployment (33%) and demands to achieve the declared goal of climate neutrality (by 2050). Luxembourg’s population is growing, reaching 634,730 in 2021; GDP per capita is $116,000. Luxembourg’s current account has been in surplus for a long time (EUR 2.711 billion). One of the effects of the corona crisis is the increase in pressure to protect the local market and the further difficulty of entering the local market. A return to pre-crisis indicators is expected in 2022/23 at the earliest.
Luxembourg is an integral part of the EU internal market. In the ranking of competitiveness of the World Economic Forum (WEF), the country is consistently placed in the 20th position out of 137 compared economies. According to the OECD, it is not an export risk country.
Civil aviation industry
Luxembourg is oriented towards satellite and space technologies. There are a number of specialized companies investing in the so-called “mining of minerals from space” (asteroid mining) and the so-called “new, ultra-light materials”. Opportunities for cooperation are also offered in connection with the membership of both countries in the European Space Agency (ESA), or with the bilateral MoU on cooperation in the prospecting and use of space resources from 10/2018.
Transport industry and infrastructure
According to allcountrylist, Luxembourg is one of the important logistics and transport hubs of the region, many Luxembourgish and foreign companies do business in the area. Despite the tangible effects of the corona crisis, opportunities are theoretically offered especially in road transport and aviation.
The country produces billion kWh, consumes billion kWh, imports 84% of its energy (despite opposition to nuclear, including nuclear, from France), benefits from domestic and foreign (Baltic states) renewable and water resources (16% ). Selected energy-intensive fields (steel industry, mining) have been undergoing restructuring for the past 30 years. There is room to participate in the construction of smaller power plants (wind energy, biomass, solar panels). Reducing the country’s energy intensity (decarbonization) and external energy dependence is a significant challenge for Luxembourg, even in view of its active involvement in the COP agenda and the 2030 Agenda.
The market for ICT services is largely saturated, especially in the financial services sector, but the demand for IT experts continues. Czech exporters can consider outsourcing in the field of web design, e-commerce, telecommunications or consulting services.
The tasks aimed at modernization in the field of transport (landless mobility), housing construction (proliferation of inadequate housing), reducing the energy demand of buildings (insulation) and environmental reclamation (post-industrial spaces of former steel mills, waste treatment plants) are ambitious, also thanks to the expected maintenance of the trend of dynamic demographic growth country (according to estimates, the population should rise to 1 million people by 2050, according to Eurostat, Luxembourg is one of the top 276 European regions in terms of population growth).
A drastic improvement of the disproportionately burdened transport infrastructure (especially in the capital and in the south of the country) cannot be assumed in the short term, but the investment plan does include new transport arteries (especially north-south), expansion of highways (another lane for shared rides, buses, electric cars), collection parking lots (on the outskirts of larger cities) and the development of public transport (free from 3/2020).
Water management and waste industry
The local ecological-innovation cluster implements sustainable development projects in a number of localities that were until the end of the 20th century. a center of heavy industry and steelmaking (Belvaux, Dudelange). A spectrum of opportunities is offered especially for the supply of integrated ecological technological solutions (recultivation).
Entertainment and leisure
The Luxembourg market has been solidly creditworthy for a long time, and the popularity of art objects is high. Although the environment is highly saturated and competition is high, there are many opportunities for application, mainly in the field of graphic but also industrial design, including the processing of noble materials (wood, stone, plastics, glass/porcelain) and useful objects (outdoor/garden furniture, toys, furniture, jewelry, etc.).
In recent years, the administration has paid increased attention to the development of the domestic tourism sector. However limited the country’s natural beauty and cultural attractions are, massive subsidies for infrastructure (accommodation, parking spaces, advertising) and special programs (ecological tourism) continue. In addition to (shorter, intensive) tourist stays, there are also opportunities for specialized stays (winemaking, balneo-, sports tourism) or, due to the aging population, multi-generational or leisure activities aimed at older fellow citizens.
Agricultural and food industry
Given the saturation of the market, Luxembourg is more of an opportunity especially for the export of food products with a high added value and for culinary specialties (“produits du terroir”).