Andorra Submits 2027 Budget with €835M Spending and €43M Deficit

The Andorran government has submitted its draft 2027 state budget to the Consell General, projecting revenues of just over €791 million and spending exceeding €834.8 million, for a €43 million deficit—an 11% rise in overall figures from 2026.

Finance Minister Ramon Lladós presented the plan on 17 September, describing it as the last budget of the current Democrats-led legislature. He noted that all recent budgets have started with projected shortfalls but closed with surpluses in 2023, 2024, and 2025, thanks to rigorous planning that avoids burdening future finances.

Revenues are buoyed by robust tax growth, including €183 million from corporate taxes (up 14%), €99 million from personal income tax (up 20%), €18 million from non-resident income tax (up 38%), and €206 million from VAT (up 14%). Custom duties fell 5.9%, led by a 34.3% drop in tobacco, though Lladós stressed that traditional sectors are still expanding, if more slowly, with direct taxes reducing reliance on other sources and enhancing resilience.

Key spending priorities include housing, with over €23 million across programs: €5 million for rental aid, €6.7 million to complete Borda Nova II and Cedre buildings, €5 million for new home purchases, €2.2 million for Fundació Laurus, €1.5 million to promote affordable rentals, and €1.7 million for purchase guarantees—bringing total public housing investment this legislature to €150 million.

Health receives €115.6 million, with €60 million for CASS social security, €55.6 million for SAAS public health services, and €6.4 million for related investments. Social spending covers €26.3 million in family aid, €7.1 million for solidarity pensions, and €2.2 million for supported youth.

Education allocations feature €43.7 million for Andorran schools, €13.3 million for Fundació Privada Nostra Senyora de Meritxell, €5.4 million for the University of Andorra, €2.3 million for educational centres, €1.8 million for French-school initiatives, and €1.5 million to convert Hotel Pol into student housing.

Infrastructure gets €9.9 million for the Sant Julià de Lòria bypass, €1.7 million for La Massana bypass, and €6.5 million for Trava works, with €134 million invested in roads this legislature; public buildings receive €3.2 million to renovate Hotel Casamanya and €14.3 million for upgrades. Overall real investments total €88.6 million, up 9%. Personnel costs rise 8% to €199 million, adding 10 police posts, eight firefighters, 12 in the Presidency Ministry (including five investigators), and social affairs reinforcements. Current transfers hit €368 million (up 13%), over half to communes, SAAS, and CASS.

Lladós highlighted Andorra's GDP growth of 3.3% in the first half of 2026—exceeding forecasts and outpacing Spain's 2.7% and France's 0.9%—with debt at its lowest since 2011 and projected at 28% by end-2026. Andorra Turisme gets €23 million, and the national emergencies centre €2.3 million.

The submission came five weeks ahead of schedule for 1 January approval, despite August hurdles. Lladós expressed confidence in a €10 million 2026 surplus, positioning Andorra for sustainable growth and diversification.