Fitch Affirms Andorra's A- Sovereign Rating with Stable Outlook

Fitch Ratings has confirmed Andorra's long-term sovereign debt rating at A- with a stable outlook, citing the country's robust economic and institutional foundations.

The agency's report, released Friday evening, points to low public debt as a key strength. It forecasts debt at 30.9-31% of GDP in 2025—well below the average for 'A'-rated peers—and projects a decline to 28.8% by 2027, driven by fiscal surpluses and economic growth. Fitch anticipates 2.8% GDP expansion in 2025, outpacing the eurozone average, bolstered by high GDP per capita and governance indicators that exceed those of comparable nations.

Prudent fiscal policies have sustained macroeconomic stability amid a difficult global backdrop. The banking sector remains strong, with adequate capitalisation, liquidity and regulatory frameworks increasingly aligned with European standards. Progress in Andorra's alignment with the European Union could bolster medium-term growth, the agency noted.

Challenges persist due to the principality's small size and limited economic diversification. Structural issues, including labour shortages, an ageing population, housing pressures and reliance on imported energy, continue to weigh on prospects. The government has responded with targeted measures and public investment, particularly in housing. The stable outlook signals confidence in ongoing sound economic management.