Second wave destroyed prospects of a quick economic recovery

Contrary to initial projections in the spring, the economic recovery is not around the corner, according to the Chamber of Commerce.

The prospect of a rapid recovery after this “terrible year” is receding because of the new health measures brought about by the second wave of coronavirus. This is the assessment drawn by the Chamber of Commerce during its traditional press conference on the economic situation on Tuesday.

The socio-economic situation is very volatile, and it is difficult to make forecasts, informs the director of the Chamber of Commerce, Carlo Thelen.

Industry’s great hope was the vaccine, thanks to which economic activity could gradually return to normal. The tourism, events, and Horesca sectors were particularly affected by the crisis and their situation may not improve for several years.

This is why the Chamber of Commerce is calling for public assistance to be maintained, if not extended, and for administrative procedures to be reduced to a minimum.

Growth is down 3.5 percent this year and will scarcely cover in 2021, with the current forecasting seeing GDP increase by 4 percent next year. Nevertheless, the Luxembourg economy has done well, considering the circumstances. According to the Chamber of Commerce, this is mainly due to the stability of the financial centre. Up until now, the crisis has had relatively little impact on the sector.

In this volatile economic context, the Chamber of Commerce expects the government to take specific political actions: adapt funding packages to the needs of businesses, avoid the creation of additional costs, guarantee employment, promote competitiveness, and plan investments to finance a relaunch of the economy.