Andorra

After Andorra's economy contracted by 12% in real terms in 2020, we expect the economy to rebound by about 5% in 2021 and to recover in line with the economies of Spain and France. Andorra's economy remains highly concentrated on financial services, tourism, and commerce, which explains the large pandemic-induced contraction in 2020 and first-quarter 2021. Andorra is now a member of the IMF, which has fostered greater availability of public statistical data. We anticipate that fiscal consolidation will resume from 2022 and contribute to a decline in the government debt-to-GDP ratio. We expect the government's temporary budgetary measures to be gradually phased out as the economy recovers. Our assessment of high contingent liabilities from Andorra's large financial sector constrains

...Institutional and economic profile Flexibility and performance profile We expect a solid economic recovery during 2021-2024, following the COVID-19-induced recession in 2020. + After Andorra's economy contracted by 12% in real terms in 2020, we expect the economy to rebound by about 5% in 2021 and to recover in line with the economies of Spain and France. + Andorra's economy remains highly concentrated on financial services, tourism, and commerce, which explains the large pandemic-induced contraction in 2020 and first-quarter 2021. + Andorra is now a member of the IMF, which has fostered greater availability of public statistical data. Withdrawal of temporary budgetary measures and economic recovery will drive the reduction in government debt-to-GDP ratio. + We anticipate that fiscal consolidation will resume from 2022 and contribute to a decline in the government debt-to-GDP ratio. + We expect the government's temporary budgetary measures to be gradually phased out as the economy recovers....

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