Andorra Inflation Hits 4.9% in April, Highest Since 2023 on Surging Fuel Costs

Andorra's inflation rate climbed to an estimated 4.9% in April, the highest since November 2023, propelled by rising fuel prices that have spread to other key categories, according to the advanced indicator from the Statistics Department released on Monday. The figure, based on 97% of updated prices, reflects an 0.8 percentage point rise from March's 4.1%—more than double April 2025's 2.2% and above April 2024's 3.9%.

Transport led the increase, with fuel costs now affecting food and non-alcoholic beverages, as well as housing, water, gas, electricity, other fuels, and miscellaneous goods and services, which offered partial moderation. The monthly change reached 1.2%, again dominated by transport, followed by smaller rises in housing, food, and miscellaneous items.

The escalation stems from Middle East conflict, triggered by US and Israeli strikes on Iran, which disrupted oil supplies and pushed up European energy prices. A ceasefire has halted further intensification, though ongoing uncertainty sustains pressure, particularly on fuels.

Andorra's rate significantly outpaces neighbours: Spain's advanced indicator fell 0.2 points to 3.2%, supported by government fuel tax reductions, while France's rose 0.5 points to 2.2%.

The International Monetary Fund has warned that these inflationary pressures, combined with external shocks from the Middle East war and higher energy imports, will contribute to a broader economic slowdown. It forecasts GDP growth dropping from 3.9% in 2025 to 2.1% in 2026, settling near 1.5% by around 2030—Andorra's estimated potential—amid structural challenges like population ageing, housing shortages, and tourism limits. Inflation is expected to hover near 3% in 2026 before easing.

Final April data will be published on 14 May.