Andorra Forecasts €60M Surplus for 2025, Passes 2026 Budget

Andorra's government expects to end the 2025 fiscal year with a €60 million surplus, Finance Minister Ramon Lladós stated Thursday at the Consell General during the final debate on the 2026 budget.

Lladós opened the session by noting that the 2025 budget had projected a €35 million deficit based on 1.9% GDP growth. Actual expansion reached 2.8%, driving higher public revenues through sharp rises in corporate taxes and non-resident income tax (IRPF) collections, as well as steady VAT (IGI) intake. "This is thanks to the good evolution of the economy," he said, describing the result as a shift from deficit to surplus despite executing all planned investments in housing and infrastructure. He called the forecasting "too prudent" and contrasted Andorra's performance with most European nations, where deficits typically worsen.

The announcement framed the 2026 budget, presented amid a positive macroeconomic backdrop with GDP projected at €4 billion by year-end and 2.8% growth. Revenues are forecast at €710 million—a 12% increase—with direct taxes contributing €256 million, including €160 million from corporate taxes (up 59%) and €83 million from IRPF (up 8%). Indirect taxes will yield €366 million, up just 2% due to tobacco trends. Expenses total €750 million, also rising 12%, broken down into €596 million in current spending, €81 million in direct investments, €51 million in capital transfers, and €17 million in financial costs.

Priorities emphasise housing with over €16 million allocated—bringing cumulative spending to more than €85 million from 2023-2026—plus €4.8 million to ease rental cost pressures for vulnerable families. Health takes 22% of the budget, while social affairs funding grows 7%. Lladós defended social measures as "rights acquired by workers through their efforts," not assistencialism, noting that 80% of 2024's €327 million in health and pensions came from social security contributions. Inflation stood at 2.7% in 2025, with the minimum wage rising twice as fast and median wages up 5.3%.

Opposition parties PS and Concòrdia criticised the budget process, with PS leader Pere Baró decrying a three-hour commission that allocated "37 seconds per amendment" before rejection, calling it inadequate for the year's key law. Concòrdia head Cerni Escalé highlighted housing challenges, noting families now need three times the effort to buy a home compared to 30 years ago. Lladós countered that amendments affected just 1-2% of the budget and reflected prior work, with groups Demòcrates and Ciutadans Compromesos backing approval.

The budget passed with majority support, underscoring the government's focus on financial resilience amid economic strength.