Andorra: Income and Its Drivers in a Long-Term Perspective

Income in Andorra has stagnated in the last 50 years. Starting from a very high level compared to peers, it has not grown as fast, as investment and productivity have lagged behind. In this study, we analyze the dynamics of income growth in Andorra from 1970 to today, comparing it to peer countries in Europe. We look at how peer countries successfully improved their income over time. Our findings suggest that investments in higher value-added sectors would be needed to keep the Andorran growth at potential and creating the right environment is key.