Page 94 - Economic report 2020

The prospects for the first half of 2023 indicate that construction will continue to show very
dynamic behaviour, but the rate of activity will gradually moderate as rising interest rates and the
loss of household purchasing power lead to a gradual adjustment in demand. As for the trend in
prices, businesses predict that the upward trend will ease a little.

XII. Services

Services are at the core of the Andorran economy, representing 86.3% of global GVA and 85.9%
of total employees. The predominance of this sector means that its trend largely determines the
performance of Andorran GDP. After six consecutive years of positive variations between 2014
and 2019, with average annual growth of 1.8%,
there was a sudden drop of 8.6% in 2020, due
to the restrictions to contain the spread of the SERVICES SECTOR GVA
pandemic. In 2021 and 2022, however, the Variation rate in real terms Chart 12.1
sector recovered strongly (+7.7% in 2021 and
+7.1% in 2022), mainly thanks to the return to
normality of the sectors most affected by the
restrictions, such as hotels, catering, transport
and commerce.

GVA in services grows 7.1% and
92
regains the pre-pandemic level.

In terms of GVA, the balance for 2022 was
positive in the three largest subsectors of Source: Department of Statistics.
services, but growth was especially remarkable
in commerce, hotels and catering, transport,
and information and communications, at 11.8%, added to the 3.6% growth in the previous year.
Remember that this is the segment that shrank most in 2020. As for the subsector of financial,
real estate, professional and technical activities, which suffered the least in the pandemic, this
Andorran economy: developments in the main sectors | XII. Services
saw an increase of 5.4% in 2022, added to that of 2021 (+12.8%). Finally, the subsector of public
administration, education, health, social and personal services grew 4.1% in 2022, very similar to
the rate in the previous year (+4.7%).

Of the three subsectors, the only one that still did not recover the pre-pandemic (2019) level of
GVA is commerce, hotels and catering, transport and ICT, although it came very close in 2022
(only 3% below). The rapid economic recovery
is partly due to the measures adopted by Commerce, hotels and catering,
the Government in 2020 and 2021 to limit transport and ICT is the only subsector
the economic consequences of closures and
restrictions. The most important of these were that still did not recover pre-pandemic
the ERTO furlough scheme and direct support levels in 2022.
to the self-employed; the guaranteed loan
scheme for businesses; the deferment and payment in instalments of tax; the aid towards rent or
mortgage payments of businesses affected by the restrictions, and the discounts on electricity
and telecommunications bills.