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Luxembourg Economy

    Economy—overview: The stable, prosperous economy features moderate growth, low inflation, and low unemployment. The industrial sector, until recently dominated by steel, has become increasingly more diversified. During the past decades, growth in the financial sector has more than compensated for the decline in steel. Services, especially banking, account for a growing proportion of the economy. Agriculture is based on small family-owned farms. Luxembourg has especially close trade and financial ties to Belgium and the Netherlands, and as a member of the EU, enjoys the advantages of the open European market. It joined with 10 other EU members to launch the euro on 1 January 1999.

    GDP: purchasing power parity—$13.9 billion (1998 est.)

    GDP—real growth rate: 2.9% (1998 est.)

    GDP—per capita: purchasing power parity—$32,700 (1998 est.)

    GDP—composition by sector:
    agriculture: 1%
    industry: 22%
    services: 77% (1998 est.)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): 1.4% (1998)

    Labor force: 226,500 (one-third of labor force is foreign workers, mostly from Portugal, Italy, France, Belgium, and Germany) (1998 est.)

    Labor force—by occupation: services 83.2%, industry 14.3%, agriculture 2.5% (1998 est.)

    Unemployment rate: 3% (1998 est.)

    Budget:
    revenues: $5.46 billion
    expenditures: $5.44 billion, including capital expenditures of $NA (1997 est.)

    Industries: banking, iron and steel, food processing, chemicals, metal products, engineering, tires, glass, aluminum

    Industrial production growth rate: 3.3% (1995 est.)

    Electricity—production: 1.158 billion kWh (1997)

    Electricity—production by source:
    fossil fuel: 90.12%
    hydro: 9.88%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 5.381 billion kWh (1996)

    Electricity—exports: 800 million kWh (1996)

    Electricity—imports: 5.8 billion kWh (1996)

    Agriculture—products: barley, oats, potatoes, wheat, fruits, wine grapes; livestock products

    Exports: $7.1 billion (f.o.b., 1996)

    Exports—commodities: finished steel products, chemicals, rubber products, glass, aluminum, other industrial products

    Exports—partners: Germany 28%, France 18%, Belgium 15%, UK 7%, Netherlands 5%

    Imports: $9.4 billion (c.i.f., 1996)

    Imports—commodities: minerals, metals, foodstuffs, quality consumer goods

    Imports—partners: Belgium 38%, Germany 25%, France 11%, Netherlands 4%

    Debt—external: $NA

    Economic aid—donor: ODA, $65 million (1995)

    Currency: 1 Luxembourg franc (LuxF) = 100 centimes; note—centimes no longer in use

    Exchange rates: Luxembourg francs (LuxF) per US$1—34.77 (January 1999), 36.299 (1998), 35.774 (1997), 30.962 (1996), 29.480 (1995), 33.456 (1994); note—the Luxembourg franc is at par with the Belgian franc, which circulates freely in Luxembourg
    note: on 1 January 1999, the European Union introduced a common currency that is now being used by financial institutions in some member countries at the rate of 0.8597 euros per US$ and a fixed rate of 40.3399 francs per euro; the euro will replace the local currency in consenting countries for all transactions in 2002

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)