Andorra la VellaThe evaluation agency Fitch Ratings has published this Friday night the rating of Andorra and placed it again at A- with a stable outlook, maintaining the grade and outlook that was reached in July 2022 and that it was maintained during the assessments made in 2023.
In the report, the evaluators have indicated that the grade is based on prudent fiscal management, reaching a surplus of 2.4% (the Government’s surplus is 0.68%) of GDP at the end of 2023 – above the average of countries with a similar rating – and a forecast of around 1% for 2024 and 2025. The agency attributes this downward variation to the Government’s decision to allocate a large part of the investments to the creation of a public housing stock at an affordable price.
Fitch Ratings has also highlighted that the debt ratio of the country’s public administrations was 36.5% in 2023 and it is expected that this will continue to gradually decrease until it reaches 31.6% at the end of 2026. It is also ‘has underlined the fact that there will be no need for any external refinancing until the year 2027.
Regarding the growth of the Andorran economy, the report predicts real GDP growth of 1.5% for 2024 and 1.4% for 2025, after real growth of 1.4 % registered in 2023. The agency highlights the Government’s commitment to strengthen the attractiveness of the country to attract high added value investments with the current amendment to the foreign investment law. According to Fitch, the process of getting closer to the European Union through the association agreement will favor the economic diversification of the Principality in the medium term.
Finally, another point that the agency continues to highlight has been the high resilience of the banking sector, emphasizing the capital and liquidity ratios achieved, and the improved profitability of the entities in recent years.
