Page 48 - economic report 2021

SUMMARY OF FORECASTS FOR THE ANDORRAN ECONOMY 2022-2023
Interannual variation rate (%) Table 5.5

TOTAL NUMBER OF INTERNATIONAL GOODS CONSUMER PRICE
GDP GVA
WAGE BILL EMPLOYEES TRADE (NOMINAL) INDEX
Year Nominal Real Nominal Real Nominal Imports Exports December Annual average
2022 7.2 5.2 7.0 4.9 6.3 3.2 19.5 148.1 4.5 3.9
2023 4.5 3.3 4.4 3.2 4.3 3.6 5.7 4.8 0.6 0.4

Source: Department of Stat st cs.

hotels and catering and, to a lesser extent, commerce; while the number of job seekers continued
to fall significantly in the first half. Along the same line, imports increased a spectacular 47.3% in
the first half. There were notable increases in imports of building materials (value) and fuels (litres).
This indicator, together with others like the increase in car registrations to June and electricity
consumption to May suggest a very positive trend in demand and economic activity during the
first half of 2022.

However, the level of uncertainty around forecasts is still high, largely due to the impact
of the armed conflict in Ukraine on prices of energy and other commodities. The strong
inflationary pressures internationally (reaching two-digit rates in neighbouring Spain this
summer), rising interest rates, the energy crisis and the continuing problems in product and
commodity supplies, aggravated by the war in Ukraine, are causing downward revisions of
growth forecasts for European countries, which could in turn lead to a slowdown in economic
growth in Andorra in the second half of 2022. Another potentially limiting factor on Andorra’s
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economic momentum are the major adjustments in the labour market, leading to growing
problems in finding qualified workers.

The Chamber’s business climate survey shows the major preoccupation of businesses relating to
this focus of concern. Specifically, 3 of every 4 businesses feel affected by rising prices of supplies
and materials, which push businesses’ operating costs up and could contribute to a significant
reduction in business margins if they cannot pass them on to sales prices. Also notable is the fact
that 49% of all the surveyed businesses state that they have supply problems or stock shortages.
And in the labour sphere, 40% of all businesses have problems finding qualified staff, a problem
The Andorran economy: general developments | V. Activity and demand
that is especially evident in construction, where 8 of every 10 businesses declare that they
have problems filling jobs, and also in hotels
and catering, where 57% of hotels state their The good performance in services,
concern about finding qualified staff. especially tourism, will drive economic

growth in Andorra throughout 2022.
On a positive note, we would highlight that
Spain is one of the European countries with the
most positive forecasts for 2022 (the IMF predicts GDP growth of 4%), and France is also expected
to continue to grow (2.3% according to the IMF), which, as is well known, represents a major factor
of support for the Andorran economy.

In this context, there is confidence that the Andorran economy will see a good performance
throughout 2022, thanks to the recovery in tourism, and will exceed the expectations from the
start of the year, so it could manage to regain pre-COVID levels of activity. The official forecasts
published in June by the Department of Statistics are for real GDP growth of 5.2% in 2022, higher
than in Spain or France, with a lower average inflation rate than in the neighbouring countries.
Note also that in July, Fitch rating agency revised its growth forecast for Andorra upwards, from
5.2% to 7.6%. S&P also revised it in July, but more modestly (from 4.5% to 4.7%).