INFERRED GROSS VALUE ADDED
In 2024, Luxembourg’s financial sector generated an estimated EUR 17.3bn in gross value added (GVA), up from EUR 13.1bn a decade earlier. This represents an average annual growth rate of 2.8% over the period 2014-2024, highlighting the sector’s strong and sustained contribution to the national economy – both in absolute terms and as a share of total output.
Banking remains the largest contributor to financial sector’s GVA, accounting for approximately 43% of the total. It is followed by investment fund management, which contributes around 22%, and legal, audit, and consulting services which collectively represent 15% of the sector’s value added.
Over the ten-year period, however, the banking sector’s contribution has remained stable, with an average annual increase of just 0.2%. This has led to a decline in its share of total financial sector added value – from just over 56% in 2014 to just over 43% by the end of 2024.
In contrast, both investment fund management and professional services experienced robust growth, expanding at 6.8% and 8.5% per annum respectively. This dynamic growth explains the increase in their respective contributions to sectoral GVA: investment fund management rose from nearly 15% in 2014 to almost 22% in 2024, while professional services grew from almost 9% to slightly over 15% over the same period.
After peaking in 2022, the financial sector’s added value began to decrease from 2023 onward, although to a level still above the pre-COVID average. We hypothesise that the historically high added value in 2021 and 2022 were influenced by particularly buoyant market conditions directly after the lifting of pandemic restrictions. The drop from 2023 onwards we hypothesise to be attributable to the impact of the Ukraine conflict on markets and the increasingly unstable geopolitical environment that has developed subsequently.