RTL Today – Statec: 18% drop in fixed mortgages; demand decreases

Like the rest of Europe, Luxembourg must prepare for a difficult semester, writes Statec in its latest “Flash Conjoncture”.

Although the figures for the second quarter of Luxembourg are not yet available, it is clear that the financial sector has experienced difficulties during this period due to the deterioration of the stock market. On the positive side, things are looking up for non-financial services, although inflation is of course affecting everyone.

As for the third quarter, however, the outlook for industrial production remains gloomy. With stock markets trending higher since late July, there is little optimism in the financial sector.

What is currently striking in Luxembourg is that in the second quarter, 18% fewer fixed-rate mortgages were granted. Contracts with variable interest rates, on the other hand, increased by 5.4%. In general, the demand for mortgages is down.

However, there is good news from the Horeca sector. The sector is looking for a remarkable recovery in 2022 after the covid crisis. The sector is also almost back to its pre-crisis level in terms of workforce.

And in terms of inflation, Statec predicts 6.6% for this year and 5.4% for next year. It is still possible that another index tranche will be invoked at the end of the year.

Statec continues to project growth of 2% for 2022. For 2023, 4% is forecast.

You can read the full flash conjuncture for August 2022 here.