countryaah, Luxembourg is a high-income country with solid economic
growth, low inflation and unemployment and has one of the
highest living standards in Western Europe. The country's
GDP per capita has been among the world's highest for a
number of years. In 2004, GDP per household was estimated at
USD 58 900 per household, which was the highest in the
world. Luxembourg's economic prosperity is based in the iron
and steel industry, which was established in the 19th
century. The steel industry was particularly hard hit by the
economic crisis of the mid-1970s when increased production
costs and increased competition from other countries
resulted in a number of closures. The industry has later
become much more differentiated. manufacture of chemicals
and rubber, and a new high-tech industry has been
Growth in service industries, and especially the banking
and finance sectors, has been significant and has
compensated for the decline in the steel industry.
Luxembourg is one of Europe's most important financial
centers, and in 2003 178 banks and 14 350 holding companies
were established in the country. In addition, several
international organizations have a seat here. In 2004,
service industries contributed slightly more than 80% of GDP
and 85% of employment.
Beautiful scenery and many medieval castles are
attractions that draw tourists to the country. In 2004,
Luxembourg was visited by approx. 925,000 tourists.
The agricultural sector (including forestry) has very
little significance in terms of both. income and employment.
Agriculture is based on small, family-owned units that are
mechanically and efficiently operated. Luxembourg is
self-sufficient with some agricultural products. The main
products are cereals and potatoes besides grapes along the
Moselle (Moselle wine). Animal husbandry and the production
of dairy products are also important. Competition from other
EU countries has put the country's agricultural industry
under pressure and helped change the production from the
traditionally important grain and potato growing to more
meat and dairy products.
Some grain and root crops are grown in the Ösling region
in the north, and forestry plays a certain role. In the
warmer and more fertile Gutland region of the south, grains,
fodder crops, fruits, flax and hemp are grown.
The iron and steel industry was previously based on the
country's own iron ore deposits, an offshoot of the "minette
ore" in the French part of Lorraine. Despite the cessation
of the ore mining (1981), there is still steel industry
based on imported ore, especially in Esch-sur-Alzette
(Aciéries Réunies de Burbach-Esch-Dudelange, ARBED).
Of the other industry, the chemical industry and the
manufacture of rubber and plastic products are the most
important. Other manufacturing of metal products, machinery,
paper and foodstuffs. A more high-tech-based industry, with
the production of computer equipment and audio-visual
equipment, is growing.
Steel and metal products, plastics and rubber products,
machinery and agricultural products, especially wine are the
main export goods. However, large revenue comes from export
services. The country's liberal tax and corporate laws have
led to hundreds of foreign firms setting up nominal offices
in the capital. Income from tourism also has a certain
significance. Imports include minerals and metals,
machinery, transport equipment and oil products. Belgium,
Germany and France are the most important trading partners.
Transport and Communications
The transport network is well-developed. motorways
linking Luxembourg to neighboring motorways. The river port
Mertert by the canal Moselle and the freight terminal at
Wasserbillig is of great importance to the iron and steel
industry. Outside the capital Luxembourg is the country's