Page 111 - Economic report 2018

which are carried out with equal simplicity, speed security and efficiency. Now that Andorra
has joined, the SEPA has expanded to 36 countries: the 28 EU member states, Iceland, Norway,
Liechtenstein, Switzerland, Monaco, San Marino, Vatican City and the Principality of Andorra.

In 2019 Standard & Poor’s outlook for As for Andorra’s sovereign rating, Fitch Ratings
Andorra improves from stable to positive, agency confirmed Andorra’s rating as BBB+

and Fitch confirms the BBB+ rating. with a stable outlook in the note published on
2 August 2019. The assessors acknowledged
the Government’s continued policies to adapt
to international standards and highlighted the fact that Andorra was removed from the EU list
of non-cooperative jurisdictions. The agency also rated positively the balanced management
of the executive budget, based on a moderate, convergent tax framework and progressive
reduction of the public debt, and highlighted the soundness of the fiscal framework and the
positive economic developments. The assessors also remark that Andorra’s willingness to join
the International Monetary Fund; progress in negotiations for an associate agreement with the
EU, and other factors such as the reduction of the risk of contingent liabilities in the banking
sector could lead to an improved rating for Andorra in future ratings. For its part, in July 2019,
the agency Standard & Poor’s revised Andorra’s outlook from stable to positive and confirmed
its rating as BBB / A-2. The agency’s last rating was in January when it already confirmed the
BBB / A-2 rating, which it has held since July 2017, but the outlook then was stable. In their
rating note, S&P acknowledged Andorra’s policies to align with international standards and also
rated positively the progressive reduction of public debt.

Finally, in 2018, Andorra’s five banks faced the final part of their transformation, working hard
towards transparency and convergence with international regulations and standards. All the 109
Andorran Banks maintained their international ratings, demonstrating the agencies’ confidence
in the sector thanks to continued positive results in terms of profitability and solvency. The
sector has managed to adapt to new international conditions while maintaining the aggregate
dimension. In fact, in 2018, the total number of employees in all five banks was 2,618 – 1.5%
less than in the previous year, largely due to retirements without replacement. Approximately
52% of these are people working in Andorra, i.e. 1,390 employees, a figure that has been quite
stable in the last five years.

3. Tourism

According to the official GDP figures, the hotels The number of visitors grows
and catering sector represents about 8.4% of 2.2%, to 8.3 million.
Andorran GVA (according to 2017 data), but
the indirect impact of tourism is higher, as it
strongly influences other sectors, such as commerce and leisure and sporting activities, which
greatly depend on visitors. This means that the favourable trend in tourism that has been seen
since 2014 was fundamental to the improvement in Andorra’s economic situation. The sustained
growth in the sector was the result, on the one hand, of the overall improvement in surrounding The Andorran economy: developments in the main sectors | XII. Services
countries – basically Spain and France - and, on the other hand, new tourist attractions that were
promoted by both the public and private sectors to win over an ever more demanding clientele
looking for new experiences. The annual balance was positive for the tourist sector in 2018, as
indicators of demand show a generalised increase since 2017.

In 2018, Andorra received the highest The good progress in tourism is reflected
number of tourists since 2003. in the increase in the number of visitors in
2018, for the fifth consecutive year, putting