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Andorra Tourism Statistics

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Tourism in Andorra

Development of the tourism sector in andorra from 1999 to 2021.

Tourists per year in Andorra

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Tourism receipts in Andorra per year

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Andorra: Economy

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andorra tourism economy

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Boosting public investment would catalyze the post-pandemic recovery by fostering employment and economic activity and facilitating the transformation toward more resilient and greener economies. As the focus shifts toward securing an economic recovery, Andorra should aim to reverse the declining public investment trend by building on the already well-developed sectoral strategies to scale-up and fast track some of the planned investments. The near-term focus could be on reassessing implementation of the existing pipeline of projects, advancing digital transformation, and diversifying the tourism sector. In the medium-term, adapting to climate change could include artificial snowmaking to help keep ski resorts remain open during warmer winters, and advancing the energy transition initiatives. Analysis shows that the real GDP level could be 3 to 6 percent higher in the medium-term, compared to staff’s baseline projections, with a faster return to the precrisis unemployment rate.

Public Investment to Catalyze Andorra’s Recovery 1

Boosting public investment would catalyze the post-pandemic recovery by fostering employment and economic activity and facilitating the transformation toward more resilient and greener economies. As the focus shifts toward securing an economic recovery, Andorra should aim to reverse the declining public investment trend by building on the already well-developed sectoral strategies to scale-up and fast track some of the planned investments. The near-term focus could be on reassessing implementation of the existing pipeline of projects, advancing digital transformation, and diversifying the tourism sector. In the medium-term, adapting to climate change could include artificial snowmaking to help keep ski resorts remain open during warmer winters, and advancing the energy transition initiatives. Analysis shows that the real GDP level could be 3 to 6 percent higher in the medium-term, compared to staff’s baseline projections, with a faster return to the precrisis unemployment rate .

1. Andorra’s public investment has been on a declining trend, in line with developments in most advanced economies . General government public investment has declined from 24.3 to 5.7 percent of GDP and from 6.4 to 2.5 percent of GDP between 2000 and 2020 (see Figure 1 ). This trend is in line with the decline observed across countries in the European Union (EU) and other advanced economies. Andorra’s public capital stock, however, remains smaller than in many of its peers.

Figure 1.

Stylized Facts on Public Investment

Citation: IMF Staff Country Reports 2021, 108; 10.5089/9781513573168.002.A002

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2. The COVID-19 crisis adds to the importance of modernizing and revamping existing infrastructure to meet current and future challenges . As the health crisis resolves, and the focus shifts from saving lives and providing lifelines to households and businesses, the government should aim to reverse the declining public investment trend that started even before the pandemic. With the right policies, the post-pandemic economy could be more resilient, inclusive, and greener. Done in a timely manner and safeguarding quality, public investment could play a central role in the recovery. Despite their high costs, investment projects that maximize social payoffs also preserves fiscal space as they are temporary in nature and could lead to future increases in fiscal revenue.

3. Advanced economies benefiting from lower nominal interest rates and low inflation can more easily scale-up investment but should balance the benefits with worsening debt dynamics . High-quality investment projects could benefit from even more favorable terms as the assets created generate taxable returns which are priced into the sovereign risk. Moreover, with large economic slack, public investment could have a larger impact than in normal times, including through larger crowd-in of private investment. However, these potential effects should be balanced with the risk of abrupt changes in global market sentiment, worsening debt dynamics amid still-high spending needs, and the degree of uncertainty about the economic recovery.

  • Andorra’s Initial COVID-19 Response: Impact on Public Investment

4. As the COVID-19 crisis started to unfold, Andorra’s immediate focus—as in most of the world—was to address the health emergency and provide support to households and businesses . The government passed an extraordinary budget in March 2020—hereafter denoted ‘2020 COVID-19 budget’—incorporating measures to address the health and economic crisis amounting to €65 million (2.6 percent of GDP), consisting of relaxation of tax obligations, increase in health spending and current transfers to households and business, and direct support to select public enterprises. This was achieved through a combination of reallocation of expenditure and borrowing to compensate for the decline in domestic revenue and higher spending needs.

5. The expenditure reallocation needed to achieve the pandemic-related urgent needs weighed heavily on reductions to public investment, causing major disruptions in some ongoing and planned projects . Compared to 2019 outturn, public investment (including capital transfers) was set to increase by 0.16 percentage points of GDP in the 2020 pre-COVID-19 budget ( Figure 2 ). However, the 2020 COVID-19 budget saw a reduction in public investment by 0.45 percentage points of GDP, with a preliminary outturn showing an actual reduction by 0.36 percentage points of GDP. Although the change across countries in the EU is widespread depending on countries’ circumstances, the drop is nonetheless more drastic in Andorra. The 2021 budget sets the total expenditure size at a level similar to the 2020 pre-COVID-19 budget. However, capital expenditure (including capital transfers) is expected to decline by 15 percent (€13 million, or 0.5 percent of GDP) compared to the pre-COVID-19 plan for 2020 to compensate primarily for the additional necessary increase in transfers to the health and social sectors (see tables in Figure 2 ).

Figure 2.

COVID-19 Impact and Response

  • Boosting Andorra’s Public Investment: Priority Areas and Synergies

6. As pandemic-related spending is rolled back, public investment should be rapidly scaled up and, when feasible, planned projects brought forward starting in the second half of 2021 . A fiscal stimulus led by the general government from an additional 1 percent of GDP in investment spending per annum in 2021 to 2023 would outweigh the cost and have a high multiplier effect on output (see Annex V in the Staff Report ( IMF, 2021 )). During the partial reopening (between 2021–22) the focus should be on: (i) maintenance of existing infrastructure; (ii) ready for implementation projects; and (iii) small-sized but job-intensive projects. During the post-pandemic period (between 2022–2023) the focus should be on big, transformational projects with large long-term multiplier.

7. The investment package should build on the multiple well-developed sectoral strategies prepared by the government and these can potentially be fast-tracked or scaled-up or both . The priority areas are the following:

Disrupted (but still relevant) projects and newly identified ones : bringing back on track projects disrupted by the crisis that are still relevant, as well as newly identified ones such as key construction projects primarily led by the Ministry of Land Use Planning. Some examples include the Multifunctional Building (€35 million, partially funded), the National Heliport (through administrative licenses to the private sector), and the National Epidemiology Laboratory (costs to be determined). Other small projects that have been cut, but are still relevant, for a total cost of €7 million should also be reconsidered in the short-term. Road maintenance has not been disrupted and has partially outweighed the impact of the decline in public investment overall.

Tourism : investments to de-seasonalize the tourism sector, attract tourists from multiple destinations and interests, and to differentiate Andorra by continuing to strengthen the country’s brand are considered key priorities for both the public and the private sector. While in Andorra the bulk of the investment in the hospitality sector is undertaken by the private sector, the government plays a key role in the coordination, training, marketing, and some public investment needs for the sector. There is potential to scale up the role of the central government, including through some real investments and capital transfers to local governments and to other institutions.

Digital transformation : as part of the Government’s Horizon 2023 Strategy, the authorities are committed to digitalize government operations and the economy in the coming years. A new law on digitalization has been adopted, and the country is working to further align its digitalization program with EU practices. The authorities have developed an action plan and a strategic roadmap with over one hundred initiatives identified by priority levels with an estimated cost between €15.5 million and €18.5 million. The framework is built on two pillars: global digitalization and digital governance structures; and includes interventions on e-government, e-trade, e-tourism, e-trade, e-mobility, e-education, e-citizen, and e-justice. Fast-tracking and fully funding the entire program would contribute to the proposed boost in public investment and improve efficiency in the country.

Transportation and mobility : including through road maintenance, greening transport, and cross-border connectivity in the medium-term. The government is exploring different options to increase cross-border connectivity, including the construction of a national airport or a railway line to connect Barcelona with the Andorran ski resorts via Seu d’Urgell (Catalonia, Spain). Moreover, the authorities have plans to transition toward more sustainable local transportation methods, by increasing incentives to use public transportation and shared mobility schemes (such as bike and carsharing), as well as more energy efficient means.

Climate change adaptation and mitigation : as a microstate, Andorra would need to adapt and build its resilience to climate change. Warmer winters and lower precipitation are impacting snow production and ski seasons, a sizable part of the Andorran economy. The authorities are taking positive steps at climate mitigation with a carbon tax and by improving energy efficiencies by retrofitting existing public buildings (at an estimated cost of €1 million per building). On top of these useful initiatives, the central government could take steps toward climate adaptation by increasing its share in snowmaking investment (both in water reservoirs and snowmaking machines), which could increase winter tourism resilience. Moreover, by improving the long-term resilience of ski-tourism, the additional public investment could boost private investment, which is currently lackluster.

Andorra: National Digitalization Program—Cost Estimates

8. The Andorran central government works in close coordination with different government agencies and the private sector . Real investments have the highest fiscal multiplier (and are at the core of this analysis), but increasing capital transfers to local governments—as well as directly or indirectly to the private sector—and continued collaboration with the well-functioning State Owned Enterprises (SOEs) Forces Elèctriques d’Andorra (FEDA) and Andorra Telecom will also aid in the economic recovery and support long-term growth. While the central government does construction and maintenance of main roads and buildings, local governments are responsible for local and secondary roads as well as investments under their competencies at the local level (i.e. library, local theater, etc.), and continued collaboration with them will be beneficial for the country.

9. Indeed, beyond the central government, FEDA and Andorra Telecom are at the forefront of the energy transition and digitalization of the country and driving the transformation . For the purpose of this note, the investments of the state-owned enterprises are subsumed under private investments. FEDA’s investment plan for 2021–25 amounting to €128 million aims to increase the production of renewable energy and develop new infrastructures to help the country manage peak energy demand. It includes projects on electrical grid, renewable electricity generation, cogeneration and district heating, and efficiency and sustainability. The plan has a small financing gap of about 10–15 percent of the cost, but financing for the rest is secured. Andorra Telecom has a detailed investment plan to be implemented in 2021–24 amounting to €75 million, which is fully funded, aiming to revamp the telecommunication infrastructure of the entire country. The authorities should explore opportunities to fast-track and scale up some of these projects and to fill potential financing gaps.

  • Boosting Andorra’s Public Investment: Impact on the Economy and Public Debt Sustainability

10. In determining the size and composition of the fiscal stimulus, job creation is an essential criterion . Using the estimates for job content in different country groups presented in the October 2020 IMF Fiscal Monitor, and assuming an increase in public investment package of 3 percent of GDP based on the government’s strategies already developed, the job intensity of the public investment stimulus package is estimated. The government of Andorra could create over 500 direct jobs—over 1 percent of the labor force bringing the unemployment rate half-way to the pre-crisis level—and additional jobs indirectly depending on how much additional demand is created and the share of skilled/unskilled labor component of the investment projects selected. “Green” investments are often relatively job-intensive and should therefore be at the forefront of the government’s recovery package.

11. Moreover, public investment tends to have larger short-term multipliers than public consumption, taxes, or transfers; and it is usually larger than one . Some of the factors increasing Andorra’s investment multiplier include: (i) the fact that it is an euroized economy, which makes monetary policy less responsive; (ii) the current macroeconomic conditions as multipliers are larger in recessions and this is the deepest recession in decades; and (iii) having public debt at sustainable levels. Moreover, with the high uncertainty surrounding the recovery path, a boost in public investment would help to anchor confidence in the recovery and increase the multiplier as the private sector sees the stimulus as a commitment from the government to resolve the crisis and to create a more resilient economy. Other factors that affect Andorra’s public investment multiplier in ways that could be either positive or negative include: (i) the size and openness of the economy, as there are some potential leakages to other countries through employment and trade; and (ii) the quality of investment projects and health of the private sector balance sheets, which would be specific to each project or firm.

Andorra: Estimated Job Creation of a Public Investment Stimulus

12. The boost in public investment would support the recovery and long-term potential growth . An increase of around 1 percent of GDP per annum in 2021–2023 could lead to an estimated real GDP level between 3.1 percent and 6.2 percent higher by 2026—assuming a public investment multiplier between 1 and 2—than under the baseline scenario ( Figure 3 ). The range for multiplier is in line with the economic literature and with the authorities’ estimates of “drag effect” of each production sector using input-output matrix for Andorra. The latter finds that each €1.00 spent generates between €1.33 and €1.92 in production and is highest for construction, manufacturing, artistic and leisure activities, and finance and insurance ( Figure 3 ). Sectors with high dependency on tourism have the highest multiplier in Andorra given the tourism sector’s direct and indirect contribution to economic output and the high interdependency of the whole economy on this sector.

Figure 3.

Impact of Higher Public Investment on Output

13. Public debt is set to remain sustainable, but financing options will have to be carefully assessed to prevent a deterioration of debt dynamics with costly large infrastructure projects . Assuming additional borrowing of €100 million in 2022 to finance the proposed public investment boost, while taking advantage of the favorable international financial conditions, allows Andorra to keep its debt dynamics at sustainable levels (Annex V in the Staff Report ( IMF, 2021 )). The debt to GDP ratio peaks in 2021 at 56.7 percent and declines rapidly afterwards, as in the baseline scenario. The government of Andorra can bring the stock of debt below the fiscal debt limit of 40 percent of GDP by 2025 in the investment scenario, compared to 2024 in the baseline scenario.

International Energy Agency. ( 2020 ). Sustainable Recovery . World Energy Outlook Special Report . Paris : IEA . Retrieved from: https://www.iea.org/reports/sustainable-recovery .

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International Monetary Fund . ( 2020 ). Fiscal Monitor: Policies for the Recovery (Chapter 2) . Washington, D.C. : IMF . Retrieved from: https://www.imf.org/en/Publications/FM/Issues/2020/09/30/october-2020-fiscal-monitor .

International Monetary Fund . ( 2021 ). Principality of Andorra: Staff Report for the 2021 Article IV Consultation . Washington, D.C. : IMF . Retrieved from: www.imf.org .

Popp , D. , Vona , F. , Marin , G. , & Chen , Z. ( 2020 ). The Employment Impact of Green Fiscal Push: Evidence from the American Recovery Act . NBER Working Paper 27321 . Cambridge, MA : National Bureau of Economic Research .

Prepared by Michelle Tejada (EUR).

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  • Principality of Andorra: Selected Issues
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Exploring Andorra: A country overview

Analysis of the key factors for taking the decission to live in Andorra

Exploring Andorra: A Country Overview

The hidden Principality of Andorra, nestled high in the Pyrenees Mountains, is a European wonder to be explored. This small nation has been around since pre-historic times and enjoys influences from both Spain and France. Its unique form of co-principality combined with parliamentary democracy sets it apart from other countries in Europe. Come discover all that this remarkable principality has to offer – culture, economy and more!

Key Takeaways

  • Andorra is a unique co-principality with prehistoric origins and an evolving political structure.
  • The country features picturesque mountains, lush forests, mineral springs and outdoor activities such as skiing.
  • Andorran culture offers Catalan language, Roman Catholicism faith, festivals & traditions plus its economy is driven by tourism industry supported by government policies.

Andorra's Unique History

snow, mountain, ski

As one of Europe’s smallest countries, Andorra is distinguished by its status as a co-principality. Artefacts from prehistoric settlements have been discovered that date back to the Bronze Age and indicate an advanced urban development for the time. The medieval period brought about two paréages which dictated how the area was ruled and organized politically. These documents established a Bishop of Urgell (in 988) as sharing joint responsibility with France’s President over ruling Andorra – what has come be known as ‘co-princes’.

This unique arrangement affected not only domestic affairs but also foreign relations such within Spain, France and internationally through numerous alliances built via the United Nations, where diplomatic ties are held amongst several other nations in order to ensure peaceful resolution or progress towards common goals. This distinct form of governance continues today under a new constitution ratified on March 14th 1993: preserving history whilst introducing parliamentary democracy alongside it too!

Prehistoric beginnings.

The prehistoric origins of Andorra can be traced back to 4900–4300 BCE, when evidence from sites such as the Tombs of Segudet and Feixa del Moro reveal early settlements in its Neolithic Age. During this time period, those living within the Valley of Madriu would grow cereal crops, care for their livestock while also trading with other regions like Segre and Occitania.

Situated in Canillo Parish is one important archeological complex - Roc de les Bruixes Sanctuary- famed for funerary practices as well as ancient scripture engraved on stone murals. It remains an essential remnant that speaks to country’s past history.

Co-Principality Origins

The Co-Principality of Andorra has existed since the Middle Ages, under control of the Count of Urgell until 988 and then by Roman Catholic Diocese. In 1278 a charter was signed that would shape its current territory and government structure which includes today’s General Council or Parliament. Established in 1866 this replaced what used to be an aristocratic governing body system, providing political representation for all inhabitants across the country.

Throughout centuries before modern times economic activities such as metallurgy production, trade importation were sustained while tobacco cultivation began in 1692 contributing to overall prosperity during later years including Spanish Civil War when numerous refugees from both sides sought refuge here. Several remaining citizens themselves giving rise to increased capitalist development thereafter..

Geographic Wonders

united nations, blue, logo

Andorra’s picturesque mountainside location is perfect for tourists who are looking to explore nature. Sitting high atop Coma Pedrosa with an elevation of 2,942 meters, the highest peak in the Pyrenees serves as a stunning backdrop.

The nation is home to abundant natural resources such as forests, rivers and mineral springs that Contribute toward making it a sought after destination for outdoor recreation and conservation efforts alike. This attractive setting makes Andorra ideal for people seeking adventure amid its many impressive landscapes

Pyrenees Mountains

people, andorra, stone

The country of Andorra is situated in the Pyrenees Mountains, with a mean elevation of 1,996 meters. Its land area totaling 468 km2 (181 sq mi) mostly consists of narrow valleys and rugged mountains creating an ideal setting for outdoor activities such as skiing, snowboarding, mountain biking and hiking. Although, nowadays, Andorra is not strictly a country member of the European Union this small yet captivating nation holds many benefits to travelers wanting to experience unique elements from European culture surrounded by its ancient history that are also open those living here permanently. With all these adventures awaiting you plus more opportunities courtesy Of EU membership it’s easy to see why Andorra has become one go-to destination!

Natural Resources

Andorra is rich in natural resources, including 34% forested land and 38.3% of permanent pasture that greatly support its tourism industry as well as environmental conservation efforts. The Andorran government takes responsibility for managing these valuable assets to guarantee their use can be sustained over the years for everyone’s enjoyment - from skiing down the Pyrenees mountains or strolling through forests, rivers and mineral springs can all be enjoyed when visiting this beautiful nation. They have ensured those wonderful activities will remain available by preserving such precious sources sustainably so generations may enjoy them too!

Cultural Insights

andorra, pyrenees, mountains

Andorra is a nation which boasts of a varied culture encompassing the official language, Catalan as well its capital city Andorra la Vella. Spanish, Portuguese and French are widely spoken in this country too. Roman Catholicism serves as the main religion within it with Our Lady of Meritxell being held up as patron saintly figure. A plethora of festivals celebrated throughout the year such at contrapàs dance or marratxa demonstrate its vibrant cultural life . Skiing , snowboarding and mountain biking dominate most winter sports activities occurring both locally and through tourism to ski resorts there located around many parts for visitors from all over world to enjoy! Football , rugby basketball also contribute towards making recreation an important part of everyday existence in Andorra’s inhabitants lives .

Language and Religion

As the official language, Catalan serves as a key unifying element among Andorra’s various cultures. Its position near Spain and France has resulted in Spanish, Portuguese and French being widely spoken within the country’s borders too.

Religion also plays an important role for citizens of this nation. Roman Catholicism is by far predominant faith that many adherents practice with Our Lady of Meritxell providing additional religious importance to their culture.

Festivals and Traditions

Andorra offers a captivating glimpse into its rich cultural heritage through the many festive occasions it hosts annually. From May’s Canólich Gathering to July’s Roser d’Ordino and National Day of Andorra (Meritxell Day) celebrations, there are endless opportunities to explore the nation’s long-standing traditions.

Visitors can enjoy traditional folk dances like contrapàs and marratxa which offer an entrancing visual spectacle full of color that displays aspects from days gone by in this quaint corner of Europe.

Sports and Recreation

Andorra’s stunning landscape and top-notch facilities make it an ideal place for sports and leisure pursuits. It is renowned around the world for its ski resorts, drawing in hordes of visitors during winter who are searching for exceptional skiing and snowboarding experiences. Football, rugby, basketball - all these come together with a successful national team that competes on international level – plus activities like hiking, biking or rock climbing as well can be found here amidst the breathtaking scenery of Andorra.

Economy and Industry

snow, mountain, ski

The economy of Andorra is based on its thriving tourism industry, powerful banking sector, and flourishing financial services. Its ski resorts and picturesque landscapes attract around 10 million visitors every year to the country. This has had a positive effect on economic growth thanks to strong trade connections with Spain and France To membership within the World Trade Organization (WTO) as well as other ratified international agreements regarding commerce between countries.

In regards to imports/exports there is an emphasis placed upon machinery, vehicles, pharmaceuticals products like tobacco goods or electrical machinery along with jewelry too which have all been integral parts of contributing towards forming Andorra’s overall economics position both at present day but also for future generations looking forwards still. The relationship that exists through these different factors allow this small nation state not only prosperous opportunities amongst multiple industries but it will continue helping build stronger relations abroad concerning global markets moving into 2021 onwards from here now too .

Tourism Sector

The ski resorts in Andorra have made tourism a primary source of income for the country, as people from all around the world flock to see its stunning landscape and use its renowned skiing facilities. To ensure continued success in this industry, government policies are being used to stimulate growth throughout it while also offering visitors other outdoor activities such as hiking, biking and rock climbing – not forgetting shopping at some duty-free stores! As these efforts remain ongoing into future years, with attention given specifically towards maintaining efficient establishments that provide accommodation etc. - we should expect great things ahead when it comes to bringing money through tourism into Andorra’s economy.

Banking and Financial Services

The economy of the Principality of Andorra is greatly benefited by its well-developed and modern financial sector, particularly in terms of banking activities and services. Delivering telecommunications such as fixed telephone systems, mobile phones connections, internet service are provided through one main national provider known as STA or “Andorra Telecom”.

In recent years certain measures were taken from Andorran authorities to alleviate their traditional banking secrecy laws while personal income tax was implemented. These changes strengthen its standing on a global scale making it an attractive destination for many businesses offering commercial bank accounts along with investment advice/management asset protection planning and wealth management solutions which can be accessed via institutions like Morabanc Credit Andorrana or ‘’Andbank’’.

These modifications have been very important tools used by this principality allowing them to keep up with international trends thus contributing even more powerfully into the nation’s financial growth.

Trade Relations

Spain and France, who are major trading partners with Andorra, maintain strong economic ties. These relations have become a vital factor in the nation’s thriving industry landscape. Enabling it to remain competitive on an international scale. As part of its continued growth efforts, Andorra is involved in several organizations such as the World Trade Organization (WTO) for aiding beneficial trade prospects among other countries.

In terms of imports and exports from this country many items including machinery components like vehicles parts ,electrical systems plus pharmaceutical products & tobacco goods can be found here alongside jewelry pieces .These transactions between Spain/France and Andorra provide important resources that continue sustain their prosperous economy by supplying them valuable services or materials needed economically today .

Both nations share mutually stable business connections which allows export exchange since they both import industrial supplies being shipped out around Europe allowing better costumer service creating more demand locally helping each respective economies overall productiveness also bring exponential increases consumers satisfaction rates providing long-term stability throughout multiple markets worldwide

Government and Politics

Andorra is a distinctive nation with its own special system of government, combining co-principality and parliamentary democracy. the president of france and the bishop of urgell are the country’s two co-princes, their roles mainly ceremonial. meanwhile andorran parliament (known as general council) carries out legislative duties. it has 28 members who represent seven administrative parishes along with one single national constituency that all citizens can vote in..

The nation’s judicial branch works according to both civil law principles and customary practices, with different courts tending to varied aspects related to this field: Constitutional Court serves for interpreting Constitution rulings while High Court deals mostly criminal/civil cases matters whereas Administrative Court handles appeals against public authorities’ decisions lastly Tribunal Corts resolves disputes regarding civil or commercial issues.

This blended mix between sovereignty principle governing body representation by people AND mixed legalities have shaped unmistakably what makes Andorra a unique European state!

The Bishop of Urgell and the French President, who serve as co-princes in Andorran governance, primarily perform ceremonial duties. This arrangement speaks to a unique relationship between both Spain and France that has been preserved through centuries of history. The two countries are connected by these powerful symbolic figures signifying political stability within this small nation’s borders. Despite playing largely ornamental roles, they bear witness to an enduring bond shared with neighboring nations through their presence alone.

Parliamentary Democracy

The parliamentary democracy of Andorra has a multi-party system, with regular elections for the unicameral legislature -the General Council. The 28 members who make up this legislative body represent seven administrative parishes and also one single national constituency so as to provide representation for all its citizens. These individuals not belonging to the general council do not hold any decision making power in regards to their country’s matters. Thus ensuring that people have an influential say in government affairs and that governance is equal among all parts of the population.

Legal System

The Constitutional Court, responsible for interpreting the Constitution and evaluating appeals against laws or treaties that may be unconstitutional is a key figure in upholding Andorra’s legal system. This framework combines both civil law from France as well as Spanish customary law, guaranteeing individuals their rights while underlining democracy within the nation. It provides an extensive structure which allows justice to be dispensed properly throughout this country of two countries’ shared judicial roots.

Communication and Media

The communication and media sector in Andorra has greatly advanced, offering those living there or visiting the country a range of radio, TV and printed outlets as well as state-of-the art telecommunications infrastructure. SOM (STA) is the national telco provider providing basic services such as mobile phone network access, landline connections plus internet connectivity.

At present, individuals can find publically available broadcasters to listen to alongside commercial ones on air with newspapers - both local & global news publications – Magazines that focus on current affairs for everyone’s convenience.

Telecommunications

The Telecommunications sector of Andorra is connected to France and Spain, with a national company that provides mobile, fixed-line telephone and internet services. STA (Andorra Telecom) or SOM takes charge in sustaining as well as improving the telecommunications system throughout the country so that people living there can use modern communication tools and acquire access to numerous facilities. This firm has been responsible for offering up-to-date technologies along with related services around each corner.

Radio and Television

In the country of Andorra, there are a variety of public and commercial radio stations as well as television broadcasting networks. This includes RTVA (Radiotelevisió Valenciana) that is available through digital terrestrial TV and IPTV to provide local news, entertainment, and sports programs for viewers. Radio Nacional d’Andorraand Flaix FM bring their listeners music selections along with talk shows about current events in the area. These multiple channels ensure access to different content that caters to varied tastes across all ages living within Andorra’s borders.

Andorra offers citizens a broad range of print media to keep up with current events in the nation and abroad. Three daily newspapers, Diari d’Andorra, El Peridic d’Andorra and Bondia provide reliable news coverage while Bon Dia and Ara Andorama are popular magazines for readers looking for additional information about their country or other parts of the world. This selection ensures that residents have plenty access points into staying informed on international developments as well as local updates.

Andorra’s remarkable history and culture as a co-principality, along with its beautiful natural surroundings, make it an unforgettable destination. As one of the oldest existing parliamentary democracies in Europe today, Andorra continues to build strong connections with neighbouring countries whilst maintaining a vibrant economy amidst stunning landscapes filled with captivating festivals and activities. By exploring this incredible principality travelers can see first hand how resilient the people here are when faced by changing circumstances while also enjoying all that this unique place has to offer!

Frequently Asked Questions

Is andorra officially a country.

The small nation of Andorra lies in the Pyrenees mountain range, sandwiched between France and Spain. Covering an area of 468 square kilometres, it is home to a population estimated at 77,000 people. Making it officially recognized as a country.

Is Andorra a rich or Poor country?

The small, landlocked country of Andorra boasts a wealth that surpasses its neighbours - Spain and France – with the per capita income exceeding both European averages.

Is Andorra more French or Spanish?

It is obvious that Andorra has a more prominent Spanish influence than French, since 49% of the population are Andorrans and 25% Spaniards compared to just 4 percent being French.

Is Andorra Hispanic?

People of Andorra mostly hail from Catalonia, with some having Spanish, Portuguese and French backgrounds. Their official language is Catalan which makes it a Hispanic nation.

What is the official language of Andorra?

Catalan is the official language of Andorra, alongside French, Spanish and Portuguese. All these languages are used in various aspects such as media outlets, education and other official documents within the country. The four languages have significant presence throughout its territory ensuring communication among citizens no matter their origin or native tongue.

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Economy in Andorra

Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 10 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts.

Andorra's GDP in 2007 was $3.66 billion, with tourism as its principal component. Attractive for shoppers from France and Spain as a free port, the country also has developed active summer and winter tourist resorts. With some 270 hotels and 400 restaurants, as well as many shops, the tourist trade employs a growing portion of the domestic labour force.

Andorra's comparative advantage has recently eroded as the economies of neighboring France and Spain have been opened up, providing broader availability of goods and lower tariffs. The banking sector, with its "tax haven" status, also contributes substantially to the economy. Agricultural production is limited by a scarcity of arable land, and most food has to be imported. The principal livestock activity is sheep raising. Manufacturing consists mainly of cigarettes, cigars, 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.

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Andorra | Tourism

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Attribution 4.0 International

Arnaud Grignard

View the main City Science Andorra project profile.

With more than eight million visitors a year, tourism represents almost 30% of the economy of Andorra. By gathering and analyzing data from social media, call detail records, and wifi, we can understand the country's dynamics of tourism and commerce as well as design interventions that can improve the experience for tourists, encouraging them to visit Andorra more frequently, stay longer, and increase spending. 

Current Projects

  • Event Analysis
  • Social Network
  • Location Recommendation system

EVENT ANALYSIS

Based on the analysis of call detail records and social media, the goal of this project is to understand the tourist behaviors in Andorra.  After mining those anonymized data, we have been able to learn different patterns and behaviors of the tourism in Andorra thanks to an agent-based model developed in order to represent the flow of people. This simulation is also coupled with an interactive table called CityMatrix.

Andorra CityScope Data Observatory Contributors: Arnaud Grignard, Luis Alonso, Núria Macià (Fundació ActuaTech), Marc Vilella (OBSA), Kent Larson.

This work has been presented in 2016 at the Smart City Expo World at Barcelona. Contributors: Arnaud Grignard,Luis Alonso, Ariel Noyman, Ryan Zang, Núria Macià (Fundació ActuaTech), Marc Vilella (OBSA), Kent Larson.

SOCIAL NETWORK

The goal of this project is to let users discover the different parishes of Andorra through social media and to allow professionals to uncover some areas of the tourism business in Andorra where improvements can be made.

Contributors: Naichun Chen, Arnaud Grignard, Claire Tsao, Martin Saveski, David Sukhin, Tanya Ivonchyk, Wei Hou Wu.

andorra tourism economy

LOCATION RECOMMENDATION SYSTEM

Based on the analysis of call detail records and social media, the goal of this project is to predict the tourist behaviors and routes in Andorra and finally develop a better targeted tourist attraction recommendation system.

Contributors: Naichun Chen, Yan Leng, Alejandro Noriega, Joseph Cunningham, Reijul Sachdev.

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Andorra: Economic Outline

Economic indicators.

Andorra's economy is dependent on foreign trade and relies primarily on tourism, commerce, and financial services. Growth has picked up slowly in recent years but remains sensitive to external impacts: as such, it was severely hit by the COVID-19 pandemic but rebounded ever since. In 2023, the Andorran economy displayed resilience, surpassing its long-term potential growth rate despite facing external challenges. According to the IMF, the economy expanded by an estimated 2.3% last year, primarily propelled by the service sector and a notable influx of tourists. Looking ahead, GDP growth is anticipated to decelerate to around 1.5%, aligning more closely with its lower long-term potential. Projections indicate real GDP growth at 1.8% for 2024 and sustaining at 1.5% from 2025 onward, mirroring the average growth rate in the euro area. Andorra's public finances are generally sound, and low levels of general government debt provided the authorities with ample space to respond to recent external shocks. Despite persistent inflation and a positive output gap, the government maintained primary fiscal surpluses while moderately increasing public investment, particularly in social housing, throughout 2023. The primary balance surplus was estimated at 0.9% of GDP, with an overall surplus of 0.4% of GDP. In 2022, Andorra finalized its debt management strategy by issuing EUR 1.2 billion in Eurobonds. This move enabled the government to extend the maturity of its debt under favorable rates and broaden its financing sources. The government is projected to sustain primary balance surpluses of approximately 1% of GDP in the medium term. This trajectory is anticipated to lead to a reduction in debt to around 30% of GDP by 2027. On average, Andorra's significant current account surplus is nearly equally supported by net exports and net primary income. Tourism exports serve as the primary driver, leading to a larger trade surplus in services compared to the trade deficit in goods. This dynamic culminates in a positive overall trade balance for Andorra. Although private banking typically yields lower returns, In 2022, inflation surged to 6.2%, driven by significant increases in energy and food prices within the region, along with minor contributions from supply limitations and a slightly positive output gap. In 2023, headline inflation moderated to 5.6%, influenced notably by global fuel prices. The IMF expects inflation to decline further, to 4.3% this year and 2.4% in 2025. Andorra's economy is based on its services sector (78.1% of GDP), notably tourism, real estate, and finance (World Bank, latest data available). The banking sector is relatively large when compared to the country’s size, with the total banking assets representing around 6 times the nominal GDP, which may pose risks to the economy and the government's balance sheet, although these risks are mitigated by the high liquidity of the system and newly-created FX reserves. Andorran banks saw profitability climb to an annualized ROA of 0.8% in 2023Q3, compared to 0.6% in 2022 and 0.5% in 2021. This increase in profitability was propelled by higher interest margins, surpassing those of European counterparts (IMF). A steady rise in workforce demand drove domestic labor participation and employment levels above those seen before the pandemic. A substantial increase in residents, nearly 8% over two years, largely due to immigration, helped meet this heightened labor demand. However, this only partially addressed the growing demand, as job vacancies increased across sectors, particularly in hospitality. Although Andorra historically maintained low unemployment rates, around 2%, recent labor market tightness has been exacerbated by shortages, notably in neighboring countries' service sectors. By 2023Q3, unemployment dropped to 1.2%, with only 266 individuals unemployed—among the lowest rates in Europe and consistent with Andorra's historical levels. Government-mandated increases, totaling close to 15% in the minimum wage during 2022–23, aimed to offset workers' loss of purchasing power while also ensuring competitiveness in the Andorran labor market. Andorra's income per capita is higher than the European average, and the country has one of the highest life expectancy rates in the world. As a result, the urban environment in the Principality is safe, the healthcare system is well-developed, and the education system is trilingual (Catalan, French, and Spanish).

Source: World Bank - Latest available data.

Main Sectors of Industry

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Indicator of Political Freedom

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Political freedom in the world (interactive map) Source: Freedom in the World Report, Freedom House

Indicator of Freedom of the Press

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

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Andorra la Vella

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Escaldes-Engordany

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Sant Julià de Lòria

High quality in the country’s lowest parish.

Encamp

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Canillo

The best services in the heart of the Pyrenees.

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Exclusivity surrounded by the tallest peaks in Andorra.

Ordino

The maximum category of comfort and natural beauty.

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From 6 July to 4 August, Cirque du Soleil returns to Andorra with a new exclusive and highly sophisticated show.

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On 29 and 30 June, you've got a date with David Guetta and today's best DJs and YouTubers

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From 25 May to 9 June, enjoy the second edition of the festival

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WELCOME TO ANDORRA! WHAT TO DO? LEARN ALL ABOUT IT!

Here are just a few of the things you can do while you're staying in Andorra. Outdoors experiences: enter the beckoning realm of the luscious.

We’ve prepared a load of atypical things to do in Andorra. Don’t miss out on these new experiences.

andorra tourism economy

Enjoy our countryside with pedal power!

Choose your trail

If you love the mountains and are counting the days before once again enjoying your favourite sport, you’ll be interested in this!

We take care of you

This holiday, we’d like to offer you our very best health and wellbeing treatments.

Experience our culture

Discover Andorra’s history by visiting its museums and monuments

Churches of Andorra

Our country is home to a wide range of churches, which can be found in urban areas as well as in the heart of nature. Discover them!

Shopping

Lose yourself in the world of shopping in our streets...

From our land

The mountains have always provided resources for food products and handicrafts. Enjoy the wide range of products that are made in Andorra.

UNFORGETTABLE TIMES WITH THE PEOPLE YOU LOVE

On your get-away to Andorra you’ll discover idyllic spots and have unique experiences. Above all, it will be an unforgettable time with stories to share with your friends and family. You’ll discover some of the best activities to have fun as a couple, family or with friends.

With family

Plan a perfect trip for adults and kids where fun and entertainment are guaranteed. Here are some ideas of things to do in Andorra with children!

With friends

Choose Andorra's nature, sports, and recreation to have a blast with your favourite travel buddies

As a couple

Experience Andorra’s most romantic side in a weekend for two. A trip to bring you together!

If you’re looking for exclusivity, uniqueness and the very best quality, discover the premium side of Andorra here!

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ANDORRA AL NATURAL by NATIONAL GEOGRAPHIC

With more than 92% natural heritage, Andorra now has the best collaborator to introduce it to the world. National Geographic brings us closer to flora and fauna in the most natural way, while inviting us to become aware of and reflect on our impact on it.

An innovative project to help us understand how we relate to the environment around us and how to improve our impact on it.

Andorra al natural, the space where ideas grow

Discover Andorra at its wildest and most natural. In the company of National Geographic, you’ll go on a journey through each season of the year, and get to know the country’s most characteristic flora and fauna.

Andorra al natural

SPORTING AND CULTURAL EVENTS YOU DON’T WANT TO MISS!

Still don’t know what you can do in our country? Here are some of our most outstanding events! These include festivals, theatre, the latest exhibitions and world championships. All this and much more awaits you in Andorra!

Andorra Mountain Music

Sign up for this summer's event!

CLÀSSICAND

Classical music and dance for everyone

Rallye des Princesses Richard Mille

Andorra is the finishing line for this all-female rally

UCI Mountain Bike World Championships

The best riders in the world, once again in Andorra!  

Andorra Epic Pyrenees

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Otso Travessa d'Encamp

Sign up for the 41st year of the race!

Casamanya Extrem

Race scoring of the VK Open Championships

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Encamp

The classic accommodation... with innovative services.

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Enjoy total freedom at every time of day.

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Maximum comfort for those who love community accommodation.

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A charming rural accommodation is perfect for a few days of rest.

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PLAN A STAY IN ANDORRA THAT SUITS YOU

Whether you’ve chosen Andorra as your holiday destination or just for a short break, here you’ll find all the information you need to ensure that nothing stops you from enjoying your visit to the Country of the Pyrenees.

Plan your trip

Whatever your preferences, with this tool you can create a tailor-made plan to make the most of your stay with us.

Find out how to get here

Here we tell you how to get to Andorra by road using private and public transport, and provide details of the nearest train and plane links.

Come to Andorra by plane!

You can now fly to Andorra by plane from Madrid! The Air Nostrum company operates the Andorra-La Seu d’Urgell / Madrid route. View the scheduled flights.

Check the travel guides

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Tourist Information Offices

Our Tourist Information Offices are distributed throughout the country and can provide guidance on everything you wish to discover.

WHAT WOULD YOU LIKE TO DO?

In Andorra we have ideas for all tastes, centred on nature as well as culture, wellness and much more. Discover more!

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OFFICIAL ANDORRA TOURISM WEBSITE: ALL THE INFO TO VISIT IN SUMMER

If you’re going to visit Andorra in summer, take a look around this website. You’ll find plans, advice, multimedia material and information needed for your trip.

andorra tourism economy

Andorra is an explosion of life in summer. Lush nature abounds, and it’s waiting for you to discover it on one of many routes, on foot, bicycle, horseback or other options. The events calendar is full with festivals, performances and celebrations outdoors, and our shops and spas are open all year round. The official Andorra Tourism website is on top of it all, and we offer practical information on tourist establishments and any procedures required before making your trip. Take note of any useful info and get ready to discover the Pyrenean Country!

Hundreds of plans, personalised for you

Nature, Shopping, Culture, Relaxation... The main sections on our website bring together the best tourist plans for you, whether you’re travelling as a couple, with friends or with your family. At Andorra Tourism, we’ve put together hundreds of routes to discover the landscapes of the Principality, and what better way to explore them than by doing some sport (hiking, cycling, climbing, etc.) or along the routes covered by the Tourist Bus. We also offer information on other ideas for you to enjoy active tourism. One example is in Naturland or the adventure parks at the ski resorts (Pal Arinsal and Grandvalira) during summer. And if you want to explore our Nature Parks ( Sorteny Valley ,  La Madriu-Perafita-Claror Valley  and  Comapedrosa Valleys ), you’ll find information here about visitors centres and services.

There are also plenty of options for enjoying some culture, shopping and relaxation in the summer months. Our museum doors are open, and our Romanesque architecture is particularly beautiful in the good weather. Shopping centres and the most emblematic high streets are also constantly updating their shopping options, and we offer all the latest information. The spas and wellness complexes in the Principality continue to offer services and treatments, adapted to the summer sun, with solariums and outdoor pools. Keep browsing and find out more.

andorra tourism economy

Multimedia resources and detailed information

But we don't just tell you about the most interesting options to enjoy tourism in Andorra. We also show you them using audiovisual material: our website lets you download lots of different resources, such as  PDF guides , GPS tracks, explanatory videos and photographs of the highest quality. Some of these photos are 360º, meaning you can enjoy some fantastic virtual views. We also provide links to further information and detailed information files with all kinds of establishments: hotels, restaurants, museums, tourist offices and more.

Tips for when you visit Andorra

As you’ll see when you look around this website, the Principality of Andorra is a very special country. That’s why we offer you all the information you’ll need about the formalities to take care of before visiting: Passports, visas, customs, currency exchange, etc. Our website offers information on this and other fundamental issues, such as mobility and transport in Andorra: we help you organise your trip by car, train, bus or plane, and we offer information and links to car rental agencies, real-time road conditions and much more.

Take your time exploring our website to make sure your dream trip to the Pyrenean Country is a success!

Andorra's Nature Parks

Awaken your curiosity and get to know Andorra’s animal and plant life in our nature parks.

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New UNCTAD report: Global economic fracturing and shifting investment patterns

UN Trade and Development has called for innovative investment strategies to foster inclusive and sustainable economic growth.

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The new UN Trade and Development (UNCTAD) report Global economic fracturing and shifting investment patterns offers a comprehensive look into the future of global capital flows in a time of mounting global economic fracturing.

Firstly, the report highlights a major change: foreign investment growth isn’t keeping up with the usual economic indicators like GDP and trade. Despite a growing global economy, investment growth has been stagnating for over a decade. In a nutshell: the global markets have continued to expand, but the global factory has stopped growing.

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Multinational enterprises, the primary drivers of international production, are increasingly cautious about expanding their operations globally, especially in tangible assets. Accelerated automation, political shifts towards interventionism and protectionism, and the imperative of sustainability, on one hand, and heightened investors’ risk perception due to the pandemic and geopolitical tensions, on the other, are complicating the landscape of international investment.

Investment in services

Another major shift is the rise of the services sector in attracting investment, taking over from manufacturing. The share of cross-border greenfield projects in the services sector rose from about 65% two decades ago to over 80%. And services-related investment within manufacturing industries nearly doubled to about 70%.

Figure 1: Diverging FDI trends in manufacturing and services, number of cross-border greenfield projects, indexed 2003 = 100

Meanwhile, FDI in manufacturing has seen a significant downturn, with an average annual decline of over 10% in the three years following the outbreak of the pandemic (figure 1). This affects smaller economies that rely on manufacturing, putting them at a disadvantage and making it harder for them to join global markets and adopt new technologies.

Investment in China

Another big change is China’s shrinking role as a top destination for investment. Companies aren’t as keen to invest there anymore. Despite waning interest from multinational corporations in initiating new investment projects in China, the country continues to maintain a dominant position in global manufacturing and trade.

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Far from downsizing, ‘Global Factory China’ is thus changing its operational model from globally integrated to more domestically focused production networks while still maintaining its leadership in global trade.

Economic fracturing

Economic fracturing is a major point of the report. Digging deeper into the concept, economic fracturing is not precisely defined. Broadly, it entails the rupture of historically established investment relationships between countries. However, it’s not simply a gradual divergence of economic and business interests, which would be business as usual. Instead, it’s a sudden disruption driven by geopolitical forces, with little bearing on economic fundamentals. This aspect adds a significant component of uncertainty to normal economic and business dynamics.

The report shows that in the last decade, comprising the escalation of trade tensions, the pandemic, and recent geopolitical crises, investment relationships have become more unstable and volatile. Meanwhile, investment between geopolitically unaligned countries is in decline, showing that geopolitics plays an increasingly important role in investment location decisions (figure 2).

Figure 2: Declining share of FDI between geopolitically distant countries, cross-border greenfield projects between geopolitically distant countries as a share of total, per cent.

Sustainability and development

The last part of the report, focusing on the grand challenges of sustainability and development, presents a dual narrative. Sustainable investment is rapidly expanding in sectors such as environmental technologies and batteries and EVs. Since 2010, while manufacturing investment stagnated across all industries, the number of cross-border greenfield projects in these sectors has grown at rates of 10% and 27% per year, respectively (figure 3).

Figure 3: Growth of green FDI.

However, these emerging opportunities only partially offset the lack of FDI growth in other industrial sectors. Smaller and less developed countries are increasingly missing out on investment opportunities and becoming marginalised. Larger developing economies are capitalizing on the services sector boom, leaving smaller nations behind. This creates an imbalance that urgently needs fixing.

So, what’s the solution? The report calls for action to bridge these investment gaps. It suggests rethinking development strategies based on promoting investment in manufacturing, export-led growth, encouraging investment in sustainable goals, and strengthening global cooperation to keep investment flowing amid a very challenging geopolitical context.

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Mission Concluding Statement 

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Principality of Andorra: Staff Concluding Statement of the 2022 Article IV Mission

April 7, 2022

A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.

The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

Andorra La Vella:

The Andorran economy is recovering strongly from a deep pandemic-related recession. Positive growth surprises in the second half of 2021 resulted in an 8.9 percent real GDP growth despite the Omicron resurgence. Labor market conditions improved, with unemployment amongst the lowest in Europe. Headline inflation accelerated amid high energy prices, but inflationary pressures have been more contained than in neighboring countries thanks to long-term contracts with foreign energy suppliers. While COVID support measures were gradually withdrawn, the policy mix remained supportive in 2021.

The growth momentum is expected to remain strong in 2022 but downside risks dominate. With growth projected at 4.5 percent, activity should return to pre-crisis levels in the second half of 2022. Risks to the outlook are significant, related to the economic impact in Europe of the war in Ukraine and the sharp increase in commodity prices, the evolution of the pandemic, weaker recoveries in neighboring countries, and tightening financial conditions. Strong fiscal buffers, a large current account surplus, newly accumulated external reserves, liquid and well-capitalized banks, will help in this highly uncertain environment. However, the missed 2020-21 winter season and the sharp contraction in investment during the pandemic caused an estimated permanent income loss of about 3 percent. Real GDP growth is expected to converge to its 1.5 percent potential in the medium term. As in neighboring countries, high inflation will likely persist in 2022 and early 2023 due to still high energy prices but should ease thereafter.

Balancing fiscal prudence and growth-enhancing spending

Given the strong economic recovery, support measures were rolled back in 2021 and the focus has adequately shifted to rebuilding policy space. 2022 budget projections imply a deficit of 0.3 percent of GDP . However, if conditions deteriorate, fiscal support should be reinstated flexibly and in a targeted manner to aid those sectors most in need and prevent scarring. Thanks to fiscal discipline and an active debt management strategy, the debt ratio is set to decline rapidly to pre-pandemic levels after 2022 and to reach the fiscal rule target of 40 percent of GDP by 2024. However, the right balance needs to be found between fast consolidation to meet the fiscal rule targets and allowing for growth-enhancing spending. With broad evidence of an investment gap across sectors, available fiscal space could be used to sustain higher public investment. A well-designed investment strategy would help raise potential growth and reduce external imbalances, without compromising the prudent fiscal framework.

Reforming the pension system is a key priority to ensure sustainability and reduce contingent liabilities for the public sector. With an ageing population and a pension system characterized by low contribution rates, the Andorran social security system will accumulate deficits starting in 2024 and deplete its reserve fund by 2039. The Andorran Parliament has appointed a special commission to elaborate a reform plan before end-2022. The magnitude of the needed reform requires acting early and considering all available options (including increases in contribution and conversion rates and the retirement age), while ensuring social fairness.

The authorities have taken steps to build up international reserves on a precautionary basis. The 2021 allocation of IMF Special Drawing Rights (SDRs) increased international reserves by €96 million to about 5 percent of GDP. In addition, the authorities allocated €100 million of the debt issued in 2021 (equivalent to 3.6 percent of GDP) to international reserves.

Financial Policies to ensure resilience

Building on recent measures will strengthen the banking sector further as Andorran banks still face significant risks despite emerging from the pandemic with solid balance sheets. Banks, with assets worth 600 percent of GDP and very large assets under management off balance-sheet, are systemically important to the Andorran economy. They emerged from the crisis in a strong position, well capitalized, highly liquid and with a declining nonperforming loans ratio. However, as in many other small countries with large banking sectors, risks can be significant. The private banking model and the internationalization strategy have resulted in higher cost-to-income ratios and overreliance on foreign funding, particularly nonresident deposits that can become less stable. Large exposures and related party lending create additional risks. The Andorran Financial Authority (AFA) adopted measures encouraging banks to reduce their related party exposure to less than 15 percent of capital and transposing into its legal framework the EU regulation limiting large exposures to less than 25 percent of the bank’s capital. Enforcement remains critical to keep risks at bay.

Close monitoring and stronger supervision of the banking sector are needed to ensure continued resilience. As support measures are rolled back, detecting any deterioration in asset quality early is key. Continuing to strengthen liquidity supervision is also important, notably given the significant risk associated with the overreliance on nonresident deposits. Strengthening the AFA’s supervisory role, including by more solid funding and staffing, would help in this direction. With the ongoing consolidation of the banking system, the AFA should remain vigilant about negative impacts of lower competition.

Structural reforms and investment to boost growth in the medium-term

Raising potential growth in Andorra calls for a multi-pronged approach focused on diversifying the economy, boosting investment and building human capital. The economy faces multiple structural challenges, notably difficult geographic accessibility, a limited stock of affordable housing and a small internal market. The pandemic-induced recession exposed the vulnerability of the Andorran economy to exogenous shocks and to strong seasonality that results from high dependance on a few economic sectors and on neighboring countries. The economic loss suffered during the pandemic is large. Policies to diversify the economy are multi-pronged and should induce higher productive investment. Reducing red tape and administrative rigidities that stifle private sector initiatives, favoring access to credit and alternative sources of financing, and easing immigration requirements would support diversification and boost medium-term growth. The ongoing digitalization program is welcome progress in this direction. Designing appropriate measures to tackle frictions and bottlenecks, notably in the housing market, will help attract the needed high-skilled workers, while training will improve human capital. Current negotiations on an EU Association Agreement have the potential to unlock substantial benefits from the Andorran economy. Such reforms will facilitate investment in high-value-added sectors. Andorra’s vulnerability to natural events calls for continuing to build resilience to climate change, including by greening transportation and energy, and reducing dependency on imported energy.

Sustaining the momentum on governance reform to boost investor confidence

Strengthening economic governance further is key to Andorra’s presence in the global financial market. Since Andorra’s accession to the IMF in October 2020, the authorities have made rapid strides, have closed data gaps and have enhanced the AML/CFT framework through better and more regular monitoring of cross-border flows. The significant progress made so far should continue. Efforts to improve the quality and comprehensiveness of data and to align Andorra’s anti-corruption framework to international standards should continue. This encompasses ratifying the United Nations Convention Against Corruption, developing an anti-corruption strategy, advancing the reform of the public procurement framework, and publishing beneficial ownership information. Andorra should also persist in its efforts to close data gaps, including by fully adopting the Enhanced General Data Dissemination System (e-GDDS), refining the recently created Balance of Payments data, and developing other real, financial, and external sector statistics that are needed for effective surveillance.

The mission thanks the authorities and all our counterparts for a constructive policy dialogue, for engaging in a productive and transparent collaboration, and for their hospitality during the first official visit of the IMF to Andorra.

IMF Communications Department

Media relations.

PRESS OFFICER: Wafa Amr

Phone:  +1 202 623-7100 Email: [email protected]

@IMFSpokesperson

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Saudi Arabia expands e-visa entry permit to 3 more countries

Travel & tourism.

The e-visa permits multiple entries for a year with 90-day stays

Stock-Saudi-Skyline

Riyadh: Saudi Arabia has broadened its electronic visa (e-visa) accessibility to include citizens from Barbados, the Bahamas, and Grenada.

As per reports from the Saudi Press Agency , citizens are now able to apply online or upon arrival, with the list of eligible countries extended to 66.

The Saudi Ministry of Foreign Affairs, in collaboration with the Ministries of Interior and Tourism, announced that nationals from these three countries can acquire a visitor visa electronically or upon arrival at any of the Kingdom's international ports.

This initiative comes within Saudi Arabia’s efforts to provide an unforgettable tourist experience for visitors coming from various parts of the world.

The initiative aligns with the Ministry of Tourism's strategy to enhance global connectivity, stimulate economic diversification, and achieve Vision 2030's tourism goals, including a 10 per cent+ GDP contribution from tourism and creating one million jobs.

Tourist visa extended 

In addition to these new countries, the tourist visa extends to residents of the US, UK, EU, and holders of visit visas from these regions.

Residents of GCC countries are also eligible, allowing for tourism, Umrah pilgrimage, visiting family, and attending events.

Furthermore, transit visas for Saudia and flynas airlines permit a 96-hour stay.

The Ministry introduced the visit visa in September 2019 to showcase Saudi Arabia's tourism offerings and promote cultural experiences.

The e-visa system will expand to include more countries as the Kingdom's tourism sector grows.

Eligible countries are: 

North america.

Bahamas, Barbados, Canada, Grenada, Panama, Saint Kitts and Nevis, United States

Albania, Andorra, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Netherlands, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Montenegro, Norway, Poland, Portugal, Romania, Russia, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom

Azerbaijan, Brunei, China (Including Hong Kong And Macau), Japan, Kazakhstan, Kyrgyzstan, Malaysia, Maldives, Singapore, South Korea, Tajikistan, Thailand, Turkey, Uzbekistan

Mauritius, Seychelles, South Africa, Oceania, Australia, New Zealand

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IMAGES

  1. Planning to Visit Andorra? This Is What to Do, See, and Eat

    andorra tourism economy

  2. What Are The Biggest Industries In Andorra?

    andorra tourism economy

  3. Andorra

    andorra tourism economy

  4. Development and importance of tourism for Andorra

    andorra tourism economy

  5. Andorra Travel Guide

    andorra tourism economy

  6. 15 Best Places to Visit in Andorra

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VIDEO

  1. Andorra A Melancholic Symphony #andorra #europe #andorralavella

  2. Andorra Helicopters Andorre Hélicoptères

  3. Discover the Enchanting Beauty of Andorra: 20 Must-Visit Places

  4. driving in Andorra

  5. 10 Busted Myths Andorra Edition #shorts #facts #forallages

  6. CityScope Andorra: A multi-level interactive and tangible agent-based visualization

COMMENTS

  1. Economy of Andorra

    The economy of Andorra is a developed and free market economy driven by finance, retail, and tourism. The country's gross domestic product (GDP) was US$5.70 billion in 2023. Attractive for shoppers from France and Spain as a free port, Andorra also has developed active summer and winter tourist resorts. With some 270 hotels and 400 restaurants, as well as many shops, the tourist trade employs ...

  2. IMF Country Report No. 21/108 PRINCIPALITY OF ANDORRA

    PRINCIPALITY OF ANDORRA SELECTED ISSUES ... External Competitiveness of the Tourism Sector _____5 TABLE 1. Estimated International Investment Position (2018-2019) _____6 ... financing worries in a euroized economy without a lender of last resort and where suff icient 1 Prepared by Joji Ishikawa (STA), Ana Lariau, and Jenny Lee (both EUR). ...

  3. Andorra

    Andorra has become a popular tourist destination visited by approximately 8 million people each year drawn by the winter sports, summer climate, and duty-free shopping. ... 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. ...

  4. Principality of Andorra

    of Andorra and endorsed the staff appraisal without a meeting. The Andorran economy rebounded strongly from the large contraction caused by the COVID-19 pandemic. Growth in 2021 (8.9 percent) was supported by a recovery in tourism, retail trade, construction, and professional services. Headline inflation rose to 4.9 percent in

  5. Economy of Andorra

    The economy of Andorra is a developed and free market economy driven by finance, retail, and tourism. The country's gross domestic product (GDP) was US$5.70 billion in 2023. Attractive for shoppers from France and Spain as a free port, Andorra also has developed active summer and winter tourist resorts. With some 270 hotels and 400 restaurants, as well as many shops, the tourist trade employs ...

  6. Principality of Andorra: Staff Concluding Statement of the 2023 ...

    The Andorra economy is showing resilience and is growing slightly above the potential. Strong growth in 2022 closed the output gap after a deep COVID recession. Despite external headwinds, the economy is growing above potential, at an estimated 2.3 percent in 2023, driven by the service sector and a record number of visitors. With limited economic slack, the labor market is tight with almost ...

  7. PDF Public Investment to Catalyze Andorra'S Recovery

    Andorra's public investment has been on a declining trend, in line with developments in most advanced economies. General government public investment has declined from 24.3 to 5.7 percent of GDP and from 6.4 to 2.5 percent of GDP between 2000 and 2020 (see Figure 1). This trend is in line with the decline observed across countries in the ...

  8. PDF IMF Country Report No. 22/180 PRINCIPALITY OF ANDORRA

    Andorra was not included in the World Economic Outlook database until 2021, the pre -crisis projections used in the analysis are those produced by the Andorran authorities for the 2020 budget approved in 2019. Once the pre-crisis trend output is estimated, the next step is to determine the impact of the COVID -19 pandemic in 2020.

  9. Andorra

    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.

  10. Andorra

    The data reached an all-time high of 180.000 USD mn in 2019 and a record low of 180.000 USD mn in 2019. AD: International Tourism: Expenditures for Travel Items data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database's Andorra - Table AD.World Bank.WDI: Tourism Statistics.

  11. Development and importance of tourism for Andorra

    Revenues from tourism. In 2019, tourism revenues amounted to 1.91 billion USD, or about 60.54 percent of the gross national product. Within 1 years, the country's dependence on tourism has decreased slightly. Before the outbreak of the COVID-19 pandemic, sales were $1.91 billion billion, 60.54 percent of gross national product.

  12. Andorra: Economy

    Economic Trivia. Tourism, retail sales, and finance are the mainstays of Andorra's tiny, well-to-do economy, accounting for more than three-quarters of GDP. Trade. Source: United Nations Comtrade. Note: Top 3 trade partners are calculated by imports + exports. Top 3 Trade Partners (2018): Spain, France, and China.

  13. Principality of Andorra: Selected Issues

    1. Andorra's public investment has been on a declining trend, in line with developments in most advanced economies. General government public investment has declined from 24.3 to 5.7 percent of GDP and from 6.4 to 2.5 percent of GDP between 2000 and 2020 (see Figure 1 ). This trend is in line with the decline observed across countries in the ...

  14. IMF Executive Board Concludes 2022 Article IV Consultation with the

    The Andorran economy rebounded strongly from the large contraction caused by the COVID-19 pandemic. Growth in 2021 (8.9 percent) was supported by a recovery in tourism, retail trade, construction, and professional services. Headline inflation rose to 4.9 percent in March 2022, the highest reading in the last 10 years.

  15. Exploring Andorra: A country overview

    The economy of Andorra is based on its thriving tourism industry, powerful banking sector, and flourishing financial services. Its ski resorts and picturesque landscapes attract around 10 million visitors every year to the country. ... we should expect great things ahead when it comes to bringing money through tourism into Andorra's economy ...

  16. Economy and Tourism in Andorra

    Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 10 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. Andorra's GDP in 2007 was $3.66 billion, with tourism as its principal component.

  17. Overview ‹ Andorra

    With more than eight million visitors a year, tourism represents almost 30% of the economy of Andorra. By gathering and analyzing data from social media, call detail records, and wifi, we can understand the country's dynamics of tourism and commerce as well as design interventions that can improve the experience for tourists, encouraging them ...

  18. Economic Outline of Andorra

    The IMF expects inflation to decline further, to 4.3% this year and 2.4% in 2025. Andorra's economy is based on its services sector (78.1% of GDP), notably tourism, real estate, and finance (World Bank, latest data available). The banking sector is relatively large when compared to the country's size, with the total banking assets ...

  19. Tourism in Andorra

    Tourism in Andorra. Many tourists come to Andorra for shopping. Andorra is a tourist destination in Europe. Andorra has several major ski resorts, including Soldeu/El Tarter and Pal/Arinsal. These are very popular with tourists from Spain, France and the United Kingdom, particularly because their relatively gentle slopes are ideal for less ...

  20. Principality of Andorra: 2022 Article IV Consultation-Press Release

    The Andorran economy is recovering strongly from the pandemic, supported by a rebound in tourism, retail trade, construction, and professional services. Real GDP is expected to reach pre-crisis levels in the second half of 2022. While the unemployment rate is amongst the lowest in Europe and continues to decline, pockets of vulnerability remain. Notwithstanding significant policy buffers ...

  21. Andorra

    Tourism, the mainstay of Andorra's economy, accounts for roughly 80% of GDP. An estimated 10.2 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. One of the main sources of income in Andorra is tourism from ski resorts which total over 175 km (109 mi) of ski ground. The sport brings in ...

  22. Visitandorra, the official Andorra tourism website

    Multimedia resources and detailed information. But we don't just tell you about the most interesting options to enjoy tourism in Andorra. We also show you them using audiovisual material: our website lets you download lots of different resources, such as PDF guides, GPS tracks, explanatory videos and photographs of the highest quality.Some of these photos are 360º, meaning you can enjoy some ...

  23. New UNCTAD report: Global economic fracturing and shifting investment

    The new UN Trade and Development (UNCTAD) report Global economic fracturing and shifting investment patterns offers a comprehensive look into the future of global capital flows in a time of mounting global economic fracturing.. Firstly, the report highlights a major change: foreign investment growth isn't keeping up with the usual economic indicators like GDP and trade.

  24. Principality of Andorra: Staff Concluding Statement of the 2022 ...

    Andorra La Vella: Economic Outlook. The Andorran economy is recovering strongly from a deep pandemic-related recession. Positive growth surprises in the second half of 2021 resulted in an 8.9 percent real GDP growth despite the Omicron resurgence. Labor market conditions improved, with unemployment amongst the lowest in Europe.

  25. Saudi Arabia expands e-visa entry permit to 3 more countries

    Saudi Arabia is opening its doors to the world with a new tourist visa. International visitors from 66 eligible countries can apply for this e-Visa through a fast and easy-to-use online portal.