As Luxembourg increasingly faces capacity constraints, transitioning from labor force expansion to a growth model centred on skills and innovation is essential. Workforce upskilling, targeted innovation support, and stronger competition in the services sector would revitalise stagnating productivity. Securing the sustainability of the pension system requires a comprehensive reform in the near term to manage expenditures and boost revenues. Continuing the development of public transport and alternative mobility options, coupled with adjustments to fuel pricing and taxation of internal combustion engine vehicles, will help to meet climate targets.