The rating published by Standard & Poor’s reflects that the country’s economic activity together with a solid fiscal performance is balanced with the risk of the size of the Andorran financial system.
The agency also considers this year’s general elections could delay negotiations with international institutions, such as the association agreement with the European Union, or the International Monetary Fund (IMF), although the next Executive is expected to continue with these processes.
In fact, Standard & Poor’s points out that completing negotiations with the European Union and the IMF could lead to an improvement in Andorra’s rating, as access to the IMF would allow access to punctual financing in the event of a crisis. Likewise, a better availability of statistical data would also have a positive impact on the country’s ratings, and in this sense the agency appreciates the Government’s efforts to strengthen its statistical services and the approval of Statistical Plan 2019-2021.
On the other hand, a performance of the economy below expectations or an increase in the risks of the financial system would lead to a rating’s downgrading.
Finally, the note also welcomes the announcement that Andorra has been removed from the list of non-cooperative jurisdictions for tax purposes and the ratification that Andorra’s special regimes cannot be considered harmful.
Text: Govern d’Andorra