Andorra Sees Purchasing Power Rise, Poverty Drop in 2025 Survey

Andorra's 2025 living conditions survey, based on 2024 data, shows household incomes rising amid falling poverty rates, though material deprivation and income inequality have increased.

The Department of Statistics' Enquesta de Condicions de Vida reported average equivalent disposable income per consumption unit at €41,085, a 10% increase from €37,335 the previous year. Median income grew more modestly by 2.2% to €29,505, outpacing the 2024 consumer price index rise of 2.7%. The gap between these figures highlights stronger gains among higher earners, while middle-income households saw smaller advances.

Economy, Presidency, Employment and Housing Minister Conxita Marsol attributed the improvements to policies including minimum wage hikes exceeding inflation and free public transport, which have enhanced purchasing power and reduced housing cost burdens.

Poverty continued to ease. The at-risk-of-poverty rate—those below 60% of median income, or €17,703—fell 3.1 points to 13.3% from 16.4%. Relative poverty (under 50%, or €14,752) dropped to 7.7% from 8.8%, and severe poverty (below 40%, or €11,802) declined to 4% from 4.2%. Andorra's poverty threshold exceeds those in neighbouring Spain (€13,445) and France (€14,275), with its 13.3% rate lower than Spain's 19.5% and France's 16.3%.

Housing metrics improved slightly. Homeownership increased 2.7 points to 38.6%, while renters fell to 61.4% from 64.1%. Housing cost overburden—over 40% of income on housing—affected 8.7% of residents, down from 9.4%. Renters averaged €31,706 in income, compared to €56,008 for homeowners. Households with two or more adults and no dependents recorded the highest averages at €46,781, versus €29,575 for single-adult homes with dependents.

Income disparities worsened in key measures. The S80/S20 ratio improved from 7.1 to 6.6, but the Gini coefficient rose from 38.4 to 40.2, indicating greater unevenness. Without social benefits or pensions, it would reach 49.1. The poverty risk gap widened from 18.4% to 20.2%.

Other challenges grew. Severe material deprivation—unable to afford at least four of nine essentials—climbed to 7.3% from 5%, with one in three residents struggling to make ends meet and nearly three in ten unable to cover unexpected expenses. Common issues included 14.2% unable to afford a week's holiday and 10.3% facing heating difficulties in cold months. The AROPE rate, encompassing poverty risk, severe deprivation, and low work intensity, rose to 19.8% from 19.4%. Those easily covering expenses dropped to 66.6% from 68.6%.

Single-adult households with dependents remain most vulnerable, with 37.1% at poverty risk, 18% in severe deprivation, and 62.1% facing monthly expense pressures.