This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Resilient economic growth and macroeconomic-stability-oriented policies help address vulnerabilities. A strong budgetary position, but large contingent liabilities from the banking sector and gaps in external data constrain credit quality. --After a deceleration in 2023, Andorra?s economic activity will steady over 2024-2026, as external demand stabilizes and inflation subsides. --The net general government debt-to-GDP ratio will continue to trend down thanks to recurrent, albeit modest, general government surpluses. --Andorra remains vulnerable to external shocks, considering it is a small landlocked economy reliant on its neighbors (France and Spain), as well as on the tourism, trade, and private banking sectors. --Despite progress in rebuilding banking
