Luxembourg’s national statistics agency has said the next round of indexation could take place sooner than previously expected.
Statec had forecast earlier this year that indexation, the automatic rise in salaries and pension payments, would be triggered in the third quarter of 2026.
But in its most recent outlook, published on Wednesday, Statec said rising energy prices could mean the pay increase will happen in the second quarter of next year.
If electricity, oil and crude oil prices continue to increase by more than 5%, then the annual rate of inflation in Luxembourg could reach 2.3% in 2025, 2.2% in 2026 and 2.1% in 2027. That would spark a round of indexation in the second quarter of 2026 and again in the third quarter of 2027, Statec said.
On the other hand, if energy markets remain more muted, then consumer prices in Luxembourg are forecast to rise by 2.2% in 2025, 1.2%-1.5% in 2026 and 1.6%-1.9% in 2027. This level of inflation would cause indexation to take place in the third quarter of next year, as originally forecast.
Who gets to benefit from wage indexation and what is included?
Indexation is triggered when inflation exceeds an annualised rate of 2.5% for more than two quarters. The last round of wage and pension hikes, which are obligatory for employers in Luxembourg, was in May 2025.
