(AGENPARL) – ven 10 marzo 2023 [Mission Concluding Statements](http://www.imf.org/cgi-shl/create_x.pl?ms)
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https://www.imf.org/en/News/Articles/2023/03/10/luxembourg-staff-concluding-statement-of-the-2023-article-iv-mission?cid=em-COM-123-46220
[Luxembourg: Staff Concluding Statement of the 2023 Article IV Mission](https://www.imf.org/en/News/Articles/2023/03/10/luxembourg-staff-concluding-statement-of-the-2023-article-iv-mission?cid=em-COM-123-46220)
MARCH 10, 2023
https://www.imf.org/en/News/Articles/2023/03/10/luxembourg-staff-concluding-statement-of-the-2023-article-iv-mission?cid=em-COM-123-46220
Despite a challenging external environment in 2022, the Luxembourgish economy has proven resilient. However, the reverberations of the war in Ukraine will continue to be felt in 2023 and possibly beyond. An expansionary fiscal policy, including generous and costly support packages, has alleviated the impact of the cost-of-living shock on demand, with the implemented energy price controls and a VAT rate cut temporarily reducing pass-through to domestic prices. With persistently high core inflation and strong labor markets, fiscal policy for 2023-24, including the recent tripartite measures, risks overstimulating demand, limiting incentives for energy savings, and impeding an adjustment in housing prices to more affordable levels. Accordingly, staff recommends a broadly neutral fiscal stance for this and next year, and better targeted support measures to help people in need, while allowing price signals to work. Over the medium term, significant fiscal risks and increasing ageing-related costs call for more prudent recurrent spending than envisaged and fiscal reforms to preserve fiscal buffers. Financial sector risks have intensified since the last Article IV but the financial system appears in a good position to weather adverse shocks. Pockets of vulnerabilities (especially in real estate and investment funds) should continue to be closely monitored and action taken as needed. Luxembourg’s automatic wage indexation has not posed major challenges in a low inflation environment. However, the high inflation environment has reignited concerns about wage-price spirals and the ability of firms to adjust. Reforming the wage indexation, together with measures to contain the increase in the cost of living, in particular housing, could help continue attracting talent, while preserving competitiveness.
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