Andorra's GDP per Capita Rises 1.5% to €34,471 in 2024 Amid Strong Growth

Andorra's real GDP per capita rose 1.5% to €34,471 in 2024, driven by 3.8% overall real GDP growth amid population increases, Statistics Department figures show. Key sectors included construction (+13.9%), professional services (+12.3%) and public administration, education and health (+10.6%). Banking profits reached €175 million, up from €163 million in 2023, with return on equity at 11.1%.

Public debt fell further to €1.229 billion (32.9% of GDP), down from a 2021 high of €1.366 billion (48.6%). Corporate tax revenues exceeded €100 million post-pandemic and are forecast at €160 million this year, possibly higher despite Middle East tensions. Total direct taxes, including personal income and non-resident fees, could hit €256 million, with indirect taxes around €360 million. Low effective rates for banks and hotels—under 5%—stem from overseas profits taxed abroad, deductions for past crisis debts, ECB rules, branch expenses and investments.

The IMF's March 2026 report, presented by mission chief Jeff Danforth and Finance Minister Ramon Lladós, projects 2026 GDP growth at 2.3%, down from earlier 2.9% estimates and below 2025's actual 2.9%. Long-term growth converges to 1.5% by 2030, above European averages. Actual 2025 expansion beat forecasts, powered by finance, real estate and tourism, though diversification lags.

Labour metrics were stable: unemployment at 1.5%, projected to fall to 1.1% by end-2026; participation dipped to 84.2% over 2022-2024. Social risks rose slightly, with the at-risk-of-poverty or exclusion rate at 16.4% (up from 13.6% in 2023), though severe deprivation eased to 5.0% and low work-intensity households to 1.4%. Fiscal surplus is expected to narrow from 2025's 2.5% due to slower tax growth and higher healthcare spending. Inflation is seen easing to 2.3% in 2026 and 2% in 2027.

The RN-20 closure's GDP hit is model-based at 0.1-0.2% overall, mainly Q1, plus 0.3% fiscal drag from Pas de la Casa aid—estimates due to absent concrete data, Danforth noted. Lladós called impacts "significant for local businesses but limited economy-wide" thanks to diversification, with deeper analysis pending.

On housing, the IMF urges phasing out rent controls by 2027 to let markets balance, with targeted aid for vulnerable groups over broad freezes. Danforth said the market must "find its equilibrium," accepting transitional price rises given regulated-market gaps, and prefers specific support to general interventions. Lladós confirmed gradual rollout to avert shocks. Passive resident purchase limits—now €1 million, up from €800,000—are seen as having minimal effect on foreign investment. The Unió Sindical d'Andorra (USdA) rejected the stance, with secretary general Gabriel Ubach claiming the IMF "doesn't know Andorra's reality," warning of social conflict for pensioners, youth and workers. The Associació de Propietaris de Béns Immobles (APBI) welcomed it, with president Jordi Marticella interpreting it as a call to accelerate de-freezing while aiding the needy.

Middle East tensions, including Iran, raise energy price risks under watch, with an April update planned. Danforth stressed uncertainty but likely fuel impacts depending on duration. The IMF pushes urgent pension reforms—higher retirement age, contributions—to enable healthcare changes amid ageing, plus public-private digital/TIC push against tourism risks like climate and borders. EU association talks may delay but boost investment despite adaptation costs; Lladós hailed the "thorough, independent" review as policy-valuable. Risks remain balanced but include external shocks, infrastructure vulnerability and demographics.