English summary
Luxembourg’s statistics office, Statec, announced that a new automatic wage indexation is expected in June 2026, following its trigger in May. This would be the first indexation since May 2025. Statec stressed that its inflation forecasts remain highly uncertain due to geopolitical risks, particularly the conflict in the Middle East and the potential long-term disruption of the Strait of Hormuz.
In its central scenario, Statec expects two indexation tranches during its forecast period: one in June 2026 and another in the second quarter of 2027 (earlier than previously expected). If inflation rises faster, a third indexation could be triggered as early as the third quarter of 2026. Inflation for 2026 is projected to range between 2.3% and 4%, depending on how the international situation evolves.
The June indexation would automatically raise wages by 2.5%, also affecting pensions, family allowances, unemployment benefits, and parental leave compensation. The monthly minimum wage would increase from €2,703.74 to €2,771.30, and the qualified minimum wage from €3,244.48 to €3,325.60.
While indexation is designed to protect purchasing power, it remains controversial. Michel Reckinger, president of the Union of Luxembourg Enterprises (UEL), warned that the timing is poor, citing weak competitiveness, slow growth, rising unemployment, and increased pressure on businesses already under financial strain.