AndorraKapitel
The Andorra economy continues to be resilient and to grow above its long-term potential. Growth in 2024 surprised on the upside at 2.1 percent, driven by the service, banking and construction sectors. Inflation is subsiding gradually, reaching 2.6 percent at the end of 2024, despite limited economic slack and a tight labor market. The current account surplus remains very large, estimated at 15.1 percent of GDP in 2024. The strong performance of banks continued in 2024 supported by high interest margins and increased fees and commissions.
Going forward, GDP is expected to converge and stabilize at its long-term potential of 1.5 percent. Inflation is projected to decline to 2 percent by the end of 2025, in line with price developments in neighboring countries. In the short term, risks to the outlook are balanced. Downside risks are largely related to uncertainty in the global economy. On the upside, Andorra, like other service-oriented economies in Europe, could benefit from stronger demand, and grow faster than projected. Solid buffers mitigate risks, notably a strong fiscal position, a large current account surplus, and well-capitalized and liquid banks.
Challenges are concentrated over the medium term, as stagnating GDP per capita makes it challenging to address the impact of population aging and climate change. Bottlenecks in the housing and labor markets could have a negative impact on growth. However, greater economic diversification, higher investment and productivity would support growth over the medium term. The adoption of the EU Association Agreement could offer an opportunity to support the reform momentum and contribute to diversification, but would also bring challenges.
Source: International Monetary Fund
Kennzahlen
- Fläche
- 468 sq km
- Bevölkerung
- 81,938 (2024)
- Regierungsform
- parliamentary democracy (since March 1993) that retains as its chiefs of state in the form of a co-principality; the two princes are the president of France and Bishop of Seu d'Urgell, Spain,
- Sprachen
- Catalan (official) 44.1%, Castilian 40.3%, Portuguese 13.5%, French 10%, English 3%, other 6.8% (2022 est.)
- BIP
- $4.04 billion (2024)
- Wachstumsrate
- 3.4 % (2024)
- HDI
- 32
- Hauptstadt
- Andorra la Vella
Makroökonomische Indikatoren
Andorra has a developed economy and a free market, with per capita income above the European average and above the level of its neighbors, Spain and France. The country has developed a sophisticated infrastructure including a one-of-a-kind micro-fiber-optic network for the entire country. Tourism, retail sales, and finance are the mainstays of Andorra's small economy, accounting for more than three-quarters of GDP. Andorra's duty-free status for some products and its summer and winter resorts attract millions of visitors annually, although the economic downturn in neighboring countries has curtailed the number of tourists. Andorra uses the euro and is effectively subject to the monetary policy of the European Central Bank. Andorra's comparative advantage as a tax haven eroded when the borders of neighboring France and Spain opened; its bank secrecy laws have been relaxed under pressure from the EU and OECD.
Agricultural production is limited - only about 5% of the land is arable - and most food has to be imported, making the economy vulnerable to changes in fuel and food prices. The principal livestock is sheep. Manufacturing output and exports consist mainly of perfumes and cosmetic products, products of the printing industry, electrical machinery and equipment, clothing, tobacco products, and furniture. Andorra is a member of the EU Customs Union and is treated as an EU member for trade in manufactured goods (no tariffs) and as a non-EU member for agricultural products.
Andorra is open to, and actively seeking to attract, foreign investment. The Andorran economy is undergoing a process of diversification centered largely on the sectors of tourism, trade, property, and finance. To provide incentives for growth and diversification in the economy, the Andorran government began sweeping economic reforms in 2006. The Parliament approved three laws to complement the first phase of economic openness: on Companies (October 2007), on Business Accounting (December 2007), and on Foreign Investment (April 2008 and June 2012). From 2011 to 2015, the Parliament also approved direct taxes in the form taxes on corporations, on individual incomes of residents and non-residents, and on capital gains, savings, and economic activities. These regulations aim to establish a transparent, modern, and internationally comparable regulatory framework.
The economic reforms aim to attract investment and businesses that can contribute most to Andorra’s economic development and offer greater diversification and higher value added. Prior to 2008, Andorra offered limited foreign investment opportunities largely because of concerns about the impact of foreign firms on such a small economy.
Luxemburg und das Land
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
Convention from 02.06.2014 (Memorial 2015, A, p. 5039)
Effective as of 01.01.2017 (Memorial 2015, A, p. 5039)
Air Services agreement
None
Weitere Informationen
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact point in Andorra
Embassy of the Grand Duchy of Luxembourg in Madrid
Ambassador with residence in Madrid: Ms Elisabeth CARDOSO
Calle Claudio Coello, 78
E-28001 Madrid
Tel.: +34 91 4 35 91 64
Fax: +34 91 5 77 48 26
E-Mail: madrid.amb@mae.etat.lu
Website: madrid.mae.lu
Honorary Consul
Honorary Consul with jurisdiction over the Principality of Andorra: Mr Gilles SERRA
Urb. Ermengol Serra 015, 2D
AD700 Escaldes-Engordany
Principality of Andorra
Tel.: +376 33 21 99
E-mail: andorre@consul-hon.lu
Source: Ministry of Foreign Affairs of Luxembourg
Country risk as defined by Office du Ducroire for Andorra
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.