Page 49 - Economic report 2020

Andorran economic growth will These factors will continue to influence the
be positive in 2023 but lower progress of the Andorran economy in 2023
than in the previous year. and limit its capacity for growth. On the
other hand, tourism will still offer the greatest
contribution to growth. All in all, it appears that
Andorran economic growth will be positive in 2023 but less so than in the previous year.

The trend in neighbouring countries, especially Spain, will be another factor supporting the
Andorran economy. So, Spain is again among the European countries with the most favourable
outlooks for 2023 (the IMF has calculated an increase in GDP of 2.5%) and French economic
growth is also expected to continue to be positive (+0.8%, according to the IMF).

In this vein, the official forecasts of the Department of Statistics published in June show Andorran
real GDP growth for 2023 of 1.4%, which would be halfway between Spain and France, with a
rate of inflation remaining at relatively high levels on average (over 4%). Equally, in Moody’s review
of Andorra’s rating in July, the agency considered that the Andorran economy would continue to
grow, more moderately, in 2023 and 2024, and that inflation would slow in 2024 and 2025 and
stabilise from 2026.

VI. Prices and costs

47
1. Consumer prices

Andorra did not escape the inflationary pressures affecting the whole of Europe in 2022, due to
the effects of the outbreak of war in Ukraine in February on the prices of energy, commodities
and food. The upward trend in Andorran inflation, which had already been felt throughout 2021,
intensified in 2022, ending the year with a 7.1% rise, more than double the 3.3% of a year before
and the highest rate in the historical series available since 2002.

In comparison with Europe, the rise in prices Inflation ended 2022 at 7.1%, above
in Andorra was greater than in Spain (+5.7%), the levels in Spain and France.
from where most consumer goods come, and

Chart 6.1
ANDORRAN CONSUMER PRICE INDEX - Interannual variation rate (%)

General index Underlying index Andorran economy: general developments | VI. Prices and costs

Source: Department of Statistics.