Economic growth in Andorra has finally been 8.8% in 2022, thus confirming the economic recovery after the covid pandemic. In a previous article we already explained that the IMF revised upwards the growth forecasts for the Principality in 2022. By then, The IMF estimated that Andorra would grow by 6.6% in 2022, compared to the previous forecast of 4.5%. Thus, Andorra would be the second country with the highest economic growth in all of Europe.
However, finally the country has exceeded all their expectations. With a value of 2,800 million, Andorran GDP grew in 2022 no less than 8.8% in real terms compared to the previous year, which was 2,572 million euros. All this according to Statistics Department of the government itself. The nominal data is even better, although it does not reflect real growth due to inflation. Andorra had a nominal GDP in 2022 of almost 3,200 million euros, which represents a nominal growth of 13.4%.
This leaves us a Real GDP per capita of €34,304 for the estimated population and €32,315 for the registered population. Obviously measured annually. Therefore, per capita GDP growth of around 6%, similar to the previous year. Regarding the nominal GDP per capita, it was €39,068 for the estimated population and €36,802 for the registered population, thus assuming a growth of 10.5%, higher than the previous year, which was 9%. These differences are due to the fact that the population in Andorra grew by 2.6% in the same year 2022.
Economic growth and GDP by sectors
Yeah we break down the data by productive sectors, we check that growth is due to the rise of all sections that make up the economy of Andorra. However, some increase their GDP more than others. Below we can see them ordered according to their increase. Of course, the data is in real terms:
- Commerce, hospitality, transport, information and communications: 11.8%
- Non-financial: 7.8%
- Construction: 7.4%
- Services: 7.1%
- Financial, real estate, professional and technical: 5.4%
- Public administrations, education, health, social and personal services: 4.1%
- Agriculture: 1.2%
- Industry and manufacturing: 0.8%
As we can observe, the largest increase is due to the sectors related to tourism and shoppingas well as in more technological activities. It also highlights the significant increase in construction, something that will be very good and positive in terms of the impact on the house prices in Andorra, a controversial and very popular issue in the country due to the enormous increase in real estate prices in the last two years. Even more when approximately 70% of the buildings are flats, houses or chalets.
In short: Andorra has had a rapid recovery thanks to its great economic growth post pandemic. Thus, he has achieved already exceed the level prior to the pandemic and be above the economies of its environment. For example, Spain grew by 5.5% in 2022 and it has not yet achieved its pre-pandemic GDP level. ditto with France that barely grew 2.6% in 2022. Given further the low volume of public debt that Andorra has, is excellent news.
Further, The Andorran economy is expected to grow above the EU average until 2027. This forecast is made based on the expectations of the International Monetary Fund (IMF) for the countries around it (France and Spain). Although we should already know that the IMF forecasts fail more than a pre-election survey, perhaps it is good to know that the trend is for Andorra to improve more than its surrounding economies.