OECD Economic Surveys Luxembourg 2019

Luxembourg is one of the most prosperous economies in the OECD. However, prosperity and quality of life cannot be taken for granted. This Survey focuses on three main challenges. The first concerns housing: strong population growth and supply constraints have made prices surge, which worsens affordability and creates vulnerabilities for some households and some banks. Tackling housing supply constraints and increasing the supply of social rental housing are key to improving housing affordability. The second challenge is reviving productivity growth, which will require supporting viable non-frontier firms to catch up and to help frontier firms to innovate more. The third challenge is to achieve a more sustainable and inclusive growth. This would require, among other measures, fiscal reforms to address rising pension expenditure and tilt revenues towards environmental and property taxation. SPECIAL FEATURE: HOUSING