Economy of Andorra
The economy of Andorra is a developed and free market economy driven by finance, retail, and tourism. The country's gross domestic product (GDP) was US$5.70 billion in 2023. Attractive for shoppers from France and Spain as a free port, Andorra also has developed active summer and winter tourist resorts. With some 270 hotels and 400 restaurants, as well as many shops, the tourist trade employs a growing portion of the domestic labour force. An estimated 10 million tourists visit annually.
| Currency | Euro (EUR, €) |
|---|---|
| Calendar year | |
Trade organisations | EU Customs Union |
| Statistics | |
| Population | 77,543 (1 January 2020 est.) |
| GDP | |
| GDP rank |
|
GDP growth |
|
GDP per capita | $44,387 (nominal; 2023)
$68,998 (PPP; 2023) |
GDP per capita rank |
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GDP by sector | agriculture 11.9%, industry 33.6%, services 54.5% (2015 est.) |
| 0.9% (CPI, 2015 est.) | |
Population below poverty line | no data |
| |
Labour force | 39,750 (2016) |
Labour force by occupation | agriculture 0.5%, industry 4.4%, services 95.1% (2015) |
| Unemployment | 3.7% (2016 est.) |
Main industries | tourism (particularly skiing), banking, timber, furniture |
| External | |
| Exports | $115 million (2021) |
Export goods | tobacco products, furniture |
| Imports | $1.73 billion (2020) |
Import goods | consumer goods, food, electricity |
| Public finances | |
Government debt | $0 (2016) |
| Revenues | $403 million (2011) |
| Expenses | $470 million (2011) |
| Economic aid | no data |
Credit rating | A (Domestic) A (Foreign) AAA (T&C Assessment) (Standard & Poor's) |
There is a fairly active trade in consumer goods, including imported manufactured items, which, because they are duty-free, are less expensive in Andorra than in neighboring countries. Andorra's duty-free status also has had a significant effect on the controversy concerning its relationship with the European Union (EU). Its negotiations on duty-free status and relationship with the EU began in 1987, soon after Spain joined. An agreement that went into effect in July 1991 sets duty-free quotas and places limits on certain items – mainly milk products, tobacco products and alcoholic beverages. Andorra is permitted to maintain price differences from other EU countries, and visitors enjoy limited duty-free allowances.
The results of Andorra's elections thus far indicate that many support the government's reform initiatives and believe the country must, to some degree, integrate into the European Union in order to continue to enjoy its prosperity. Although arable land comprises less than 2% of the country, agriculture was the mainstay of the Andorran economy until the upsurge in tourism. Sheep raising has been the principal agricultural activity, but tobacco growing is lucrative. Most of Andorra's food is imported.
In addition to handicrafts, manufacturing includes cigars, cigarettes and furniture for domestic and export markets. A hydroelectric plant at Les Escaldes, with a capacity of 26.5 megawatts, provides 40% of Andorra's electricity; Spain provides the rest.