Page 56 - Economic report 2020

Chart 7.4
CURRENT ACCOUNT BALANCE AS % OF GDP. 2021

Source: Department of Statistics.

Note that, at the beginning of 2023, the Secretary of State for Relations with the EU and the Chamber
of Commerce, Industry and Services established a fixed information point about the Agreement
with the EU, to answer queries from the business sector relating to aspects that have already
been agreed in the negotiations, and also to gather any concerns and questions which need to be
expressed as the conversations progress.

The results of the Balance of Payments and International Investment Position of the Andorran
economy quantify the economic relationship between the residents of this economy and the
residents of the rest of the world, according to the principles set out in the International Monetary
Fund’s (IMF) sixth Balance of Payments and International Investment Position Manual (BPM6). The
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2021 balance of payments (latest available) shows that the Andorran economy has a financing
capacity (current account + capital account) of €395.52 million, a slightly higher figure than the
€393.23 million in 2020 but still lower than the
€507.86 million in 2019. Of the total current The reduction in financing capacity
account, the entry for goods and services shows in 2020 and 2021 can be explained
a positive balance of €229.3 million; primary
revenue (from work and investment) shows a by the fall in tourism.
positive balance of €213 million, and secondary
income a negative balance of -€47.1 million. The importance of the goods and services account
clearly demonstrates that the Principality of Andorra is an exporter of services (with a balance of
+€1,351 million) and importer of goods (with a balance of -€1,122 million). The reduction in financing
Andorran economy: general developments | VII. Foreign sector
capacity in 2020 and 2021 compared with the pre-pandemic situation can basically be explained by
the decline in the positive balance of services due to the incomplete recovery of tourism in 2021,
and also the decline in the positive balance of investment income. Finally, the ratio of the current
account balance as a percentage of GDP was 14.1% in 2021 (15.5% in 2020), lower than the 18%
it represented in 2019 but still one of the highest among the European countries, together with
Ireland, and also one of the highest in comparison with other demographically similar countries.

2. Geographical distribution of foreign trade

2.1. Imports

As mentioned, imports in 2022 saw an extraordinary increase of 34%, which can be explained by
the strong recovery in domestic demand after the COVID-19 crisis. Imports from Europe – the
main geographical source of Andorran purchases abroad – grew in line with the total and, therefore,
remained at around 92.4%, one of the highest percentages in the historical series that started in 1991.