Fitch Ratings confirms Andorra’s rating in BBB with a positive outlook

Fitch Ratings has released Andorra’s rating, which confirms the BBB rating with a positive outlook. This is Fitch’s fifth assessment of the Principality’s sovereign debt. In its analysis, the agency highlights the improvement of public finances and the decline in public debt, as well as efforts to align domestic regulation with European and international standards.

The Government appreciates ​​the positive outlook, and understands Andorra is in a good position to achieve a better rating in the next evaluations, as Fitch does not foresee events that could lead to a drop in the rating.

The international rating agency has considered, in its assessment, the rebound of the Andorran economy and its financial system after the BPA crisis. In addition, it also welcomes progress in aligning the financial regulation to international practices.
 
With regard to public finances, the agency highlighted 2016’s surplus, including positive accounting closures of the Comuns and the Caixa Andorrana de Seguretat Social’s reserve fund.
 
Despite the progress made, Fitch continues to alert on the significant weight of the country’s financial sector, and points out the lack of a lender of last resort and the low availability of Economic data.

In order to achieve an improved rating in future assessments, Fitch points to medium-term growth outlooks, the continuation of the decline in public debt with respect to the GDP, and a better availability and frequency of Economic data.