The IMF positively assesses the managing of the pandemic and Andorra´s perspectives for economic recovery

The International Monetary Fund published the preliminary conclusions of its technical staff extracted from meetings that took place within the framework of periodic consultations of the organism´s member states. In the publication they highlighted the managing of the health crisis carried out in the Principality and the capacity to react by passing mitigating economic measures to the effects of the pandemic. They also signal the good outlook for economic recovery, the stability of some sectors and the diversification strategy.

The Finance Minister, Eric Jover and the State Secretary of International Financial Affairs, Marc Ballesta, explained that this preliminary report is the one prior to the final report that may be published in June. This resolution is the fruit of around forty meetings between a technical delegation from the IMF and different managers from the General Administration, Para-public companies, as well as from the country´s business and financial sectors. The preliminary conclusions gathered in this report will be submitted for debate and the final decision of the IMF´s Executive Directorate.

Inthe first report of conclusions, the IMF positively assessed the Andorran authorities´ handling of the health crisis, especially the ability to test the population and the increasing of hospital capacity. They also highlighted the economic measures implemented to mitigate the pandemic´s negative effects on the economy.

The conclusions preview a rise in the real GDP´s growth for this year, in a global context of great uncertainty. According to the estimates, they predict a 5,8% recovery during 2021, more optimistic than the Andorran authorities´ calculations, which pointed to a recovery of 4,2%, stated by Eric Jover. They also gave a very positive assessment to the debt diversification strategy carried out.

The published note signals that Andorran Tax authorities will have to accumulate international reserves as an element to increase resilience, they also point out that, in the mid-term future, the Andorran Financial Authority must work on the possibility of increasing the banks´ capital reserves, in guaranteeing that the banks do not present a deficit in liquidity and in strengthening controls on the flow of cross-border capitals.

Text: Govern d’Andorra