Luxembourg Economy Contracts in Q2

2026-10-07 09:27 By Jereli Escobar 1 min. read

Luxembourg’s economy contracted 0.9% quarter-on-quarter in the second quarter of 2026, reversing from a revised 0.3% growth in the previous three-month period.

This marked the first contraction after six straight quarters of growth, as declines were recorded in gross fixed investment (-1.9% vs 6.3% in Q1), and household expenditure (-0.3% vs -0.8%), while growth eased for government spending (1.1% vs 1.8%).

Net trade also weighed on the economy, with both exports (-0.4% vs -1.2%) and imports (-0.8% vs -2.1%) declining at softer rates.

On the production side, declines were seen in industry, including energy and water distribution (-3.7% vs -1.6%), construction (-2.1% vs 2.7%), trade, transport, accommodation and food services (-0.8% vs 1.1%), and financial and insurance activities (-1.5% vs -0.7%).

Conversely, growth was recorded in agriculture, forestry, and fishing (4.5% vs 0.9%).

On an annual basis, GDP grew 1.3% in Q2, slowing from a revised 2.8% rise in the prior quarter.



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Luxembourg Economy Contracts in Q2
Luxembourg’s economy contracted 0.9% quarter-on-quarter in the second quarter of 2026, reversing from a revised 0.3% growth in the previous three-month period. This marked the first contraction after six straight quarters of growth, as declines were recorded in gross fixed investment (-1.9% vs 6.3% in Q1), and household expenditure (-0.3% vs -0.8%), while growth eased for government spending (1.1% vs 1.8%). Net trade also weighed on the economy, with both exports (-0.4% vs -1.2%) and imports (-0.8% vs -2.1%) declining at softer rates. On the production side, declines were seen in industry, including energy and water distribution (-3.7% vs -1.6%), construction (-2.1% vs 2.7%), trade, transport, accommodation and food services (-0.8% vs 1.1%), and financial and insurance activities (-1.5% vs -0.7%). Conversely, growth was recorded in agriculture, forestry, and fishing (4.5% vs 0.9%). On an annual basis, GDP grew 1.3% in Q2, slowing from a revised 2.8% rise in the prior quarter.
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