...- Andorra continues to post twin fiscal and external surpluses, and we expect gross government debt to GDP will remain on a downward path during 2023-2026, with the general government maintaining a net asset position. - We expect the authorities will closely monitor liquidity and financial stability risks stemming from the banking sector, which appears well capitalized but is one of the largest relative to the size of the economy of all rated sovereigns, at an estimated 564% of GDP (total assets). - In this context, we view structural reforms aimed at creating liquidity buffers to mitigate financial stability risks and addressing the rise in age-related spending as positive for Andorra's creditworthiness. - Moreover, in the next two years, we believe Andorra will further develop its statistical reporting of national accounts and balance-of-payments data, with a more detailed understanding of the external position potentially leading us to re-assess the small economy's vulnerabilities and...
