So which part of the financial services sector in Luxembourg contributes most in terms of added value to the grand duchy’s economy? It’s the banks, not the investment funds, says a new study published this week by Luxembourg For Finance and Deloitte.
In 2021, the banking sector remained responsible for the most significant contribution, representing over half of the financial services industry’s added value, with the fund industry following at just under 31 percent, the study said.
Just under a third of all jobs in Luxembourg are directly or indirectly tied to the financial services industry, representing 26 percent of the value-added to the country’s economy, as well as a significant portion of the country’s tax revenues stem from the sector, the report also showed.
Growth led by corporate banking, funds
The financial sector added value saw a compounded annual growth rate of 5.2 percent over the report’s examined period – 2011 to 2021. These largely stem from increases in the corporate banking, fund industry, and audit, consulting and legal services sectors over the period.
Tax revenues stemming from the sector have also seen strong growth during this period, recording a growth rate of 5.1% between 2011 and 2021 with all sectors of the industry contributing to the increase.
Overall, the sector has seen steady growth between 2011 and 2021 in many areas. The overall number of employees has also grown at a 2.5 percent, reaching over 64,500 directly employed in the sector. Financial services therefore represents approximately 14 percent of Luxembourg’s total workforce directly, or about one out of every seven workers.
This number increases to 29.5 percent of total wage earners in the country when the trickle-down effect is taken into account. Indeed, in 2021, for every job created in the financial sector, 1.1 other jobs in the general economy were created. This means, according to the study, that 135,519 jobs were directly or indirectly linked to the financial services industry at the end of 2021.
Added value (in EUR billions)
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