Economy of Luxembourg

Banking is the largest sector in the Luxembourg economy. In the Global Financial Centres Index, Luxembourg was ranked as having the 25th most competitive financial center in the world, and third most competitive in Europe after London and Zürich. The country has specialized in the cross-border fund administration business. As Luxembourg's domestic market is relatively small, the country's financial center is predominantly international. There were 152 banks in Luxembourg, with over 27,000 employees. Political stability, good communications, easy access to other European centers, skilled multilingual staff, a tradition of banking secrecy and cross-border financial expertise have all contributed to the growth of the financial sector. Germany accounts for the largest-single grouping of banks, with Scandinavian, Japanese, and major US banks also heavily represented. Total assets exceeded €929 billion. More than 9,000 holding companies are established in Luxembourg. The European Investment Bank—the financial institution of the European Union—is also located there. Luxembourg enterprises expected negative investment due to slowing economic growth and tighter monetary policy. The net balance of enterprises anticipating an increase in investment minus those expecting a fall is negative, far lower than the EU average.

Government policies promote the development of Luxembourg as an audiovisual and communications center. Radio-Television-Luxembourg is Europe's premier private radio and television broadcaster. The government-backed Luxembourg satellite company SES (formerly Société Europeenne des Satellites) was created to install and operate a satellite telecommunications system for transmission of television programs throughout Europe. The first SES Astra satellite, the 16-channel RCA 4000 Astra 1A, was launched by the Ariane Rocket. SES presently constitutes the world largest satellite services company in terms of revenue.

Tourism is an important component of the national economy, representing about 8.3% of GDP and employing some 25,000 people or 11.7% of the working population. Despite the current crisis, the Grand Duchy still welcomes over 900,000 visitors a year who spend an average of 2.5 nights in hotels, hostels, or on camping sites. Business travel is flourishing, representing 44% of overnight stays in the country and 60% in the capital, up 11% and 25%.

Luxembourg's small but productive agricultural sector is highly subsidized, mainly by the EU and the government. It employs about 1-3% of the workforce. Most farmers are engaged in dairy and meat production. Vineyards in the Moselle Valley annually produce about 15 million liters of dry white wine, most of which is consumed within Luxembourg and also in Germany, France, and Belgium on a lesser scale.