Fitch Ratings has published Andorra’s latest rating, which is maintained in BBB with a positive outlook. Fitch’s sixth assessment of the Principality’s sovereign debt highlights the decline in public debt, improved diversification of sources of financing and improved growth dynamics in the country.

The evaluation also highlights Andorra’s efforts to align financial sector legislation with European and international standards. The adoption of international standards for transparency and the exchange of tax information, and the fact that Andorra is no longer included in the list of non-cooperating countries of the European Union, is particularly welcome.

On the other hand, Fitch highlights the balance between the country’s economic capacity, the solidity of public finances and political stability with the small size of the economy, the risks associated with the weight of the banking sector and a deficient availability and frequency of economic data.

Despite the advances, Fitch continues to see as a risk the significant weight of the financial sector in the country’s economy, and points out the lack of a lender of last resort. To achieve an improved rating in future assessments, Fitch points to factors that could have an impact, such as the continued decline in government debt to GDP, an improvement in the mid-term growth outlook, and improved availability and frequency of economic data.

Source: Govern d’Andorra

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Author: Actua Actua