FX.co ★ Luxembourg Economy Contracts in Q4 as Investment Plummets

Luxembourg’s economy contracted by 0.1% in the fourth quarter of 2025, following an upwardly revised 1.2% expansion in the third quarter, thereby ending a run of four consecutive quarters of solid growth. The downturn was primarily driven by a sharp decline in fixed investment (-11.5% vs. +12.8% in Q3), while growth also slowed in household consumption (0.8% vs. 1.1%) and public spending (1.1% vs. 1.5%). Net trade made a modest positive contribution, as exports decreased by less than imports. On a year-on-year basis, GDP growth eased to 2.4% in Q4, down from 3.2% in the previous quarter. For the full year 2025, the economy expanded by 0.6%, slightly above the 0.4% recorded in 2024, but still significantly below the 2010–2019 historical average of 2.5% per year.