section_path: Impact by region or country/Europe/Luxembourg
section_name: Luxembourg
paragraph_text: Luxembourg
  
  The Luxembourg economy exhibited low real GDP growth prior to the onset of the public health crisis caused by the coronavirus pandemic. An already weakened economy, Luxembourg experienced a contraction of its real GDP during the first half of 2020 with a decline of 1.2% in the first quarter and a 6.2% contraction in the second quarter, suggesting a recession. After a trough in the second quarter, the economy bounced back and experienced an 8.4% expansion of its real GDP in the third quarter. That recovery was followed by a minor contraction of 0.5% in the fourth quarter of 2020. Despite the instability of Luxembourg’s GDP in 2020, the labor market showed resilience, avoiding a more significant deterioration as observed in other countries at the time.The unemployment rate in Luxembourg remained relatively steady during the first quarter of 2020 compared to the previous quarter and increased only slightly by about 0.4 percentage points in April 2020 compared to the 5.6% unemployment in October 2019. Subsequently to the contraction of GDP in the first quarter of 2020, the unemployment rate peaked at 7.5% in the second quarter, then decreased to 6.8% in the third quarter and 6.3% at the end of the year.