Luxembourg is a stable, wealthy nation with low inflation, low unemployment and that fourth highest rated quality of life index in the world, according to the Human Development Index. The World Bank calls Luxembourg the most industrialised nation on earth with a staggering EUR 34.600 income per person.

A founding member of the European Union, it continues to be a primary driver of further European integration. In the 20th century, Luxembourg evolved from an industrial economy into a manufacturing and services economy. With a financial services industry that accounts for about one-third of GDP, Luxembourg is Europe's principal center for mutual funds and a major force in the banking and insurance industries. It possesses a skilled workforce and a well-developed infrastructure.

Banking remains the lifeblood of the economy. During the past decades, growth in the financial services sector has set this Alpine idyll on a road to consistent, though moderate growth, roughly 3 to 5% annually. With current global financial markets in a state of turmoil, it remains to be seen how this will affect the Duchy of Luxembourg. So far this year, growth is down and banks across the country are tightening credit and looking for ways to prosper in the face of a global recession.

The industrial sector, which was dominated until the 1960s by steel, has diversified to include chemicals, rubber, and other products. Luxembourg has especially close trade and financial ties to Belgium and the Netherlands.