## IMF Executive Board Concludes 2026 Article IV Consultation with Andorra

_IMF News, May 4, 2026_

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## Bibliographic details
- Published: May 4, 2026

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### Key assessment and recent performance
- The Andorran economy continued to outperform expectations, with growth in 2025 estimated at 3.9 percent, driven by strong activity in financial services, real estate, and construction.
- Inflation eased to 2.4 percent in 2025 but is on an upward trend.
- Labor market is operating at near full employment.
- The current account surplus was estimated at 15.9 percent of GDP in 2025.
- Staff note that the baseline assumes oil and gas prices broadly consistent with closing future prices as of mid-March 2026 and incorporates impacts on main trading partners.

### Near-term outlook and projections
- Growth:
  - Projected to slow to 2.1 percent in 2026.
  - Projected to steadily converge to long-run potential of 1.5 percent by 2030.
  - Historical/projected real GDP (annual change, percent): 2022: 9.6; 2023: 2.6; 2024: 3.8; 2025: 3.9; 2026: 2.1; 2027: 1.8; 2028: 1.7; 2029: 1.6; 2030: 1.5.
- Inflation:
  - Projected at around 3 percent in 2026.
  - Projected to converge to the euro area inflation target of 2 percent by the end of 2027.
  - Historical/projected inflation (period average, percent): 2022: 6.2; 2023: 5.6; 2024: 3.1; 2025: 2.4; 2026: 3.0; 2027: 2.3.
- External sector:
  - Current account (percent of GDP, selected): 2023: 11.6; 2024: 15.9; 2025: 16.0; 2026: 16.1; 2027: 16.2; 2028: 16.0; 2029: 16.1.
  - Gross international reserves (millions of euros): 2022: 338.4; 2023: 338.7; 2024: 402.1; 2025: 397.2.

### Risks and vulnerabilities
- Short-term risks tilted to the downside, mainly from external factors:
  - Weaker growth among trading partners due to a prolonged war in the Middle East or new trade tensions could reduce foreign demand and push inflation higher via import prices.
  - Recent temporary road closures highlight vulnerability to cross-border infrastructure disruptions.
- Medium-term risks absent policy action:
  - Population aging will increase public expenditures on pensions and healthcare, placing growing pressure on public finances.
  - Labor shortages could worsen if housing affordability is not improved.
  - Climate change risks: rising temperatures and more frequent extreme weather events may disrupt tourism and infrastructure, emphasizing the need for diversification.
- Upside risk:
  - Approval of the EU Association Agreement could support economic diversification and enhance resilience to shocks.

### Executive Board views and policy priorities
- Directors agreed with the thrust of the staff appraisal and welcomed continued economic resilience and prudent fiscal management that rebuilt solid buffers.
- Near-term stance:
  - The looser fiscal stance in 2026 is considered broadly appropriate against slowing growth, but Directors stressed readiness to tighten if price pressures persist.
- Medium- to long-term priorities:
  - Maintain prudent fiscal policy in a euroized economy.
  - Use available fiscal space for well‑targeted, growth‑enhancing public investment.
  - Urgent pension and healthcare reforms to address population aging and safeguard long‑term fiscal sustainability.
  - Advance structural reforms to lift potential growth, enhance productivity, and diversify the economy.
  - Continue progress on the National Plan for Innovation and Diversification and strengthen public‑private collaboration.
- Financial sector:
  - Directors welcomed the assessment that the financial sector remains strong, noting banks’ solid profitability, capitalization, and liquidity.
  - They looked forward to the upcoming Financial Sector Assessment Program to assess vulnerabilities and reinforce resilience.
  - Commended efforts to make AML/CFT supervision increasingly risk‑based.
- Data and statistics:
  - Directors welcomed improvements in data compilation, timeliness, and dissemination, including external sector statistics and tourists flow data, and encouraged efforts to close remaining data gaps.

### Fiscal and financial indicators (selected exact figures)
- General government (percent of GDP, series aligned 2022–2027 where applicable):
  - Revenue: 39.7; 38.0; 39.9; 40.7; 40.1; 40.2.
  - Expenditure: 34.9; 35.9; 37.1; 37.2; 37.8; 38.3; 38.5.
  - Interest (percent of GDP): 0.7; 0.6; 0.5; 0.8.
  - Primary balance (percent of GDP): 3.3; 4.0.
  - Net lending/borrowing (overall balance, percent of GDP): 4.8; 1.9.
  - Public debt (percent of GDP, 2022–2031): 38.9; 35.4; 32.9; 30.3; 28.0; 26.9; 26.3; 25.7; 25.1; 24.5.
- Central government (selected series): 21.7; 19.8; 21.4; 22.6; 21.3; 21.5; 18.7; 19.1; 20.2; 21.0; 21.6.
- Banking sector (selected):
  - Regulatory capital to risk-weighted assets: 20.3; 20.5.
  - Credit to nonfinancial private sector, level (percent of GDP): 116.4; 101.3; 95.5; 90.5.
  - Corporates (percent of GDP): 61.8; 55.1; 51.8; 48.8.
  - Households (percent of GDP): 54.6; 46.2; 43.7; 41.7.
  - Data for 2025 is as of Q3 and are preliminary, unaudited, and subject to revisions.

### Social and memorandum indicators (selected exact figures)
- Population (2025): 89,058.
- Population at risk of poverty (percent, 2024): 16.4.
- Per capita income (2025, euros): 44,726.
- Human Development Index Rank (2023): 32 (out of 193).
- Gini Index (2024): 38.4.
- Life expectancy at birth (2024): 84.1.
- Exchange rate (€/USD, period average, 2022–2027): 0.95; 0.92; 0.89; 0.86; 0.85.
- Nominal GDP (millions of euros, 2022–2031): 3,210; 3,501; 3,736; 3,983; 4,181; 4,351; 4,514; 4,678; 4,843; 5,014.

*Source: IMF Executive Board press release, "IMF Executive Board Concludes 2026 Article IV Consultation with Andorra" (Press Release No. 26/134), May 4, 2026.*

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## References

- [Principality of Andorra and the IMF](https://www.imf.org/en/countries/and)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [www.imf.org/en/countries/and](http://www.imf.org/en/countries/and)
- [http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2026/05/04/pr26134-andorra-imf-concludes-2026-article-iv-consultation_