Principality of Andorra: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Principality of Andorra

The 2026 Article IV Consultation discusses that Andorra’s small open economy continues to grow above potential driven by external demand and a prospering financial services industry. Inflation is edging upward after a period of moderation amidst a labor market operating near full employment. The European Union Association Agreement (EUAA) offers the opportunity to deepen the integration into the EU’s single market and diversify Andorra’s sources of growth, but there will be transition costs and the exact timeframe for ratification remains uncertain. Reforms to the public pension and healthcare systems are needed to make them sustainable. Growth is expected to be restrained in 2026 due to the war in the Middle East and then slow to its long-term potential, reaching 1.5 percent by 2030 as momentum from inbound immigration and related construction moderates, and tourism growth eases given Andorra’s already high number of visitors per capita. All of the policies under consideration by the authorities would benefit from more comprehensive and timely information on the economy. Significant progress has been made on releasing data sooner, improving communication with the public, and hiring additional staff, but gaps remain.