Barely 10% of those surveyed by Idea imagine that growth will be strong enough to get Luxembourg’s economic and social machine moving again. Photo: Shutterstock

Barely 10% of those surveyed by Idea imagine that growth will be strong enough to get Luxembourg’s economic and social machine moving again. Photo: Shutterstock

The Fondation Idea has published the sixth edition of its economic consensus, from which it becomes clear that political decision-makers and economists are uncertain and pessimistic regarding future growth.

This is the sixth edition of the exercise: every year, the Idea Foundation publishes its economic consensus, an exercise designed to “reveal and analyse the feelings of a panel of economic and political decision-makers, social partners and economists on the main trends in economic development, the preferred macroeconomic scenario for Luxembourg, as well as the major political and economic challenges and the responses to these challenges.” This exercise in no way reflects the opinions of in-house economists. Out of a panel of 265 decision-makers, 115 played the game. They are perhaps the most involved, but not the most optimistic.

The end of the golden age

On the domestic front, the respondents believe that the golden age of growth in Luxembourg is “certainly behind us, at least for the next five years.” Seven out of ten (70.4%) of those polled expect a growth rate of 2%. Nearly 20% think it will be less than 1.5%, “levels which could accelerate future deficit trajectories for pensions and social security in general.” Only 10.4% of respondents forecast solid annual growth of 3%, which would get the Luxembourg economic machine moving again.

Whilst, in the face of this growth, the prospect of an acceleration and worsening of the deterioration in the social accounts is mathematically inevitable, nothing should be undertaken in the area of pension reform according to more than half of respondents for whom “2025 will not be the time for major manoeuvres”.”

At the same time, the consensus is forming on inflation at 2.1%. But employment is unlikely to regain its past momentum of over 2% growth, said respondents: more than half (55%) of them consider this possibility to be very low or rather low.

€8,541 for a square metre by 2030

Respondents expect debt to increase, but in a “reasonable” way. Last year, respondents estimated that public debt would exceed 30% of GDP by 2029 to reach 30.4%. This year, however, they anticipate a debt level of 29.8% by 2030.

As for interest rates, they believe that the downward trend will continue. Last year, respondents accurately predicted the average interest rate for new mortgages of over 10 years: 3.6%. The 2025 rate is estimated at 3.1%. This is “well above the level seen between 2015 and 2021,” notes the Fondation Idea. The price per square metre is also falling. The consensus is for a price of €8,541 by 2030. Last year, the consensus was €10,000.

Finance at the mercy of artificial intelligence

This year, the Idea Foundation introduced a series of questions relating to the impact of artificial intelligence on eight key areas for economic activity. According to the economic and political decision-makers who were polled, for these eight areas, 11% believe that AI will have little impact, 55% think that some activities in the sector will evolve, 27% say that most of the sector will transform and 7% believe that a total revolution in the sector will take place.

“It is the financial sector that will be most affected, with 10% of panellists predicting a total revolution due to AI, and 46% predicting a transformation of the majority of the business. The financial sector is thus one of the areas where AI could be disruptive. This is also the case, to a lesser extent, for healthcare and competitiveness. At the other end of the spectrum, public administration, although affected by AI, is the least transformed domain,” the study states.

This article was originally published in .

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