Luxembourg on the upside: trade, services and investment posted record surpluses

According to preliminary data from the Central Bank of Luxembourg (Banque centrale du Luxembourg) and the state statistical institute STATEC, in 2024 Luxembourg will record a current account surplus of 11.8 billion euros - 2.8 billion more than in 2023. The main drivers of growth: exports of goods and services, as well as high investment activity.

The merchandise surplus totalled €1.5 billion, up €1.1 billion. Exports rose by 3 per cent, while imports fell by 1 per cent. The increase was particularly notable for the item "goods passing without physical movement through Luxembourg", i.e. international trade turnover without transit: +155 million euros.

In addition, the deficit in general goods other than net trade narrowed, with exports increasing by €710 million and imports decreasing by €255 million.

International exchange of services increased by 6.5% compared to 2023, equivalent to +2.3 billion euros. Financial services in particular grew: exports by 5.6% and imports by 4.9%. The main reason is the 8% year-on-year increase in investment fund assets. In the non-financial services sector, growth was moderate: exports +1.7%, imports +1%.

Unlike 2023, which was a year of outflows, 2024 marked the return of direct investment:

• 123.7 billion euros invested in foreign assets
• €100.7bn raised in domestic liabilities

Investments in portfolio assets have been more mixed:

• Capital inflows into Luxembourg equities totalled €171.2bn, up from €101.5bn a year earlier.
• However, there were significant outflows in foreign equities: -€41.5bn, the same as in 2023.
• Investors favoured debt instruments, with net purchases of foreign bonds reaching €200.4bn, while Luxembourg debt securities attracted €30.8bn (versus €21.6bn in 2023).

Luxembourg's economy in 2024 has shown resilience and adaptability: a successful reorientation towards exports, increased investment activity and a balanced foreign policy have enabled the surplus to strengthen despite the volatility of global markets. Investment funds, a traditional pillar of the Grand Duchy's financial sector, played a separate role in this success.