Principality of Andorra: 2025 Article IV Consultation-Press Release; and Staff Report

Andorra is a small economy exposed to external shocks and volatility. Following the pandemic, the authorities consolidated the country’s macro-financial framework and reinforced buffers. However, Andorra’s real GDP per capita—while high in absolute terms—has remained flat over the last 50 years, with growth largely driven by population increases. As climate change challenges an economic model dependent on winter tourism and significant population aging builds up contingent liabilities, ambitious structural reforms are needed. A recently negotiated EU Association Agreement (EUAA), if approved by referendum, could provide the needed momentum for reforms.