Fitch Maintains Andorra's 'A-' Rating Amid Strong Finances

Fitch Ratings has affirmed Andorra's sovereign credit rating at 'A-' with a stable outlook, highlighting improved financial liquidity and resilient public finances despite persistent structural vulnerabilities.

A major factor bolstering the rating is the European Central Bank's EUREP facility, which provides the Andorran Financial Authority (AFA) with permanent access to repo operations using high-quality euro-denominated collateral. This replaces a prior €35 million bilateral credit line and offers up to €50 million in emergency liquidity support for the financial system.

Public finances remain a strength, with total debt across central government and communes at 30.3% of GDP in 2025—the third-lowest among 'A'-rated peers. Fitch forecasts a drop to around 27% by the end of 2028. Last year's fiscal surplus hit 3.5% of GDP, with projections averaging 1.9% annually from 2026 to 2028. These figures hold even as spending rises on housing, health, transport, digital initiatives, and energy transition efforts.

Andorra's economy grew by 3.9% in 2025, surpassing initial estimates, but growth is projected to moderate to about 2% in 2026. External positions are solid, with a net international investment position of 387% of GDP and a current account surplus of 19.6% at the end of 2025.

The agency flagged ongoing risks, including the economy's small size, limited diversification, housing and labour shortages, and an ageing population, which could hinder medium-term expansion.