With an annual inflation rate[1] estimated at 4.1% in December 2021 and 3.6% in January 2022[2] by STATEC, the rise in prices continues at a sustained rate, threatening the consolidation of the Luxembourg economy and weighing on the costs borne by companies. The effect on their competitiveness is undeniable, with the latter seeing their margins and profitability decline, and as a consequence, their capacity for innovation and investment reduced in the medium run, particularly in the digital and environmental transitions. In the long run, this can have a negative impact on the growth potential of the economy, leading to the fear that companies will fail, resulting in a loss of tax revenue for the State, a decrease in the attractiveness of Luxembourg, and a hindrance to economic diversification. In order to counter this vicious circle before it takes hold, it is time for action.
Continue readingA rise in prices for the long haul
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