As a small, landlocked economy heavily reliant on tourism and private banking, Andorra remains vulnerable to external shocks, particularly those in its two key markets, France and Spain. Approval of the EU Association Agreement could bolster Andorra?s banking industry and open up new markets for tourism and other sectors. We forecast Andorra to continue to post twin budgetary and external surpluses, limiting debt intake over the medium term Limited monetary flexibility is a key constraint on the rating. Andorra uses the euro as its official currency but does not have access to European Central Bank (ECB) financing, except for a temporary repo line. We have affirmed our long- and short-term issuer credit ratings at 'A-/A-2'. The outlook is stable. On
