Fitch Ratings re-affirms the Principality´s BBB+ rating and stable outlook despite the situation created by the pandemic

Ratings Agency Fitch Ratings has re-affirmed Andorra´s BBB+ rating and stable outlook. In the note published by the agency on Friday January 29th 2021, the evaluators gave a positive assessment to the Principality´s entry into the International Monetary Fund (IMF) last October. The agency indicates that this provides, on the one hand, a safety net for the country; and on the other, provides access to technical assistance in different points.

Regarding the economic effects derived from the SARS-CoV-2 pandemic, Fitch Ratings highlighted that the rise in unemployment numbers had been modest, despite the profound economic contraction. This is due in part, according to the agency, to the short-term employment policies put in place by the Executive. They also remark the limited rise in expenditure in spite of the significant economic aid packages provided by the Government.

The evaluation agency also praised the diversification efforts in Andorran debt and positively assesses the internationalization policies, allowing to prolong the average maturity of debt.

Lastly, Fitch Ratings stated that the dependence on the tourism sector, tied to new outbreaks of the COVID-19 pandemic, will result in an economic recession for 2020. Nevertheless, the agency considers that Andorra has the capacity of absorbing this crisis which is affecting most countries without negative effects to its long-term macro-economy.