Financial sector represents 38% of Luxembourg GDP

Luxembourg's financial sector is supporting more than a third of the country's GDP, a study has revealed.

Altogether, the sector represented 38% of GDP in the Grand Duchy in 2010, confirming its place as a crucial contributor to the national economy.

The figure was revealed by financial market promotional body Luxembourg For Finance (LFF), which described the sector as a “major contributor to the Luxembourg economy”.

The LFF report showed that the importance of the sector was growing. In 2009, finance accounted for 35% of GDP in the Grand Duchy. Meanwhile, financial institutions played an important role in job creation, employing 63,000 people, representing some 17% of the national employment rate.

Altogether, the sector paid 3.12 billion euros to the state in 2010 in the form of taxes, compared with 2.72 billion euros in 2009.

Banks represented one of the biggest source of tax revenues, paying 1.2 billion euros in 2010, a figure which was 14% lower than the year before.

The fastest growing sub sector within finance appeared to be insurance, according to the LFF survey. Tax revenues from insurance firms grew 81% from 2009 to 2010, a rise which the LFF attributes to the fact that the world's second biggest insurer Swiss Ré moved the headquarters of its European operations to Luxembourg in 2010.

Asset management, a field which thrives in Luxembourg thanks to the banking secrecy laws, contributed 6% to the Luxembourg GDP in 2010.