Despite the recent energy shock, we forecast Andorra will continue posting ample twin budgetary and external surpluses through the end of this decade. Andorra?s EU Association Agreement, set for approval by 2027, will bolster its large banking sector, with consolidated assets of about 5.5x GDP. Starting third quarter 2026, Andorran banks, through the Andorran Financial Authority, will have access to the ECB?s enhanced Eurosystem repo facility (EUREP), further reducing Andorra?s vulnerability to external shocks. We revised our outlook to positive from stable and affirmed our ?A-/A-2? long- and short-term sovereign credit ratings on Andorra. On May 8, 2026, S&P Global Ratings revised its outlook on the Principality of Andorra to positive from stable. Its long- and short-term sovereign credit ratings
