2025-05-20-IMF-安道尔_收入及其长期驱动因素（英）_12页_2mb

Andorra: Income and Its Drivers in a Long-Term Perspective

Core Content

This paper analyzes the long-term trends in income growth in Andorra, comparing it with peer countries in Europe to identify the main drivers of economic performance and the potential for future growth. It highlights the challenges Andorra faces in maintaining income levels and the importance of structural reforms and investment in higher value-added sectors.

Main Findings

• Income Stagnation: Andorra's income has stagnated over the last 50 years, despite starting from a very high level compared to its peers. It remains slightly below its level in 1970.
• Peer Performance: Peer countries such as Malta, Cyprus, Monaco, Luxembourg, and Switzerland have experienced significant income growth. Malta and Cyprus, in particular, have seen substantial increases in GDP per capita due to economic diversification, productivity gains, and reforms.
• Sectoral Contribution: In recent decades, Andorra's growth has been dominated by low value-added sectors such as tourism and real estate. The financial and insurance sector's contribution has declined following the 2015 banking crisis and global structural changes.
• Investment and Productivity: Investment and productivity in Andorra have lagged behind, contributing to the stagnation of income. In contrast, peer countries have achieved growth through targeted investments in high value-added sectors.
• Bottlenecks: Structural issues such as a limited domestic market, administrative rigidities, housing affordability, and difficulty in attracting talent are major constraints on private sector development and foreign direct investment (FDI) inflows.

Key Drivers of Income Growth

• Economic Diversification: Countries like Malta and Cyprus have successfully diversified their economies, increasing the share of high value-added sectors such as ICT and services.
• Productivity Gains: Productivity improvements have been a key factor in the income growth of peer countries.
• Policy Credibility and Business Environment: A credible policy framework and an enabling business environment have supported the development of specialized high value-added sectors.
• Reforms and EU Integration: Timely reforms, such as those implemented before EU accession, have played a crucial role in supporting growth. EU integration could also provide opportunities for diversification and access to the single market.

Recommendations for Future Growth

• Remove Structural Bottlenecks: Measures to ease the business environment, address housing availability, upskill the labor force, and attract talent in sectors such as ICT are essential.
• Promote Diversification and Specialization: A comprehensive approach to diversification, while favoring specialization, can help Andorra grow its income. This includes leveraging its microstate status to target niche markets.
• Enhance Innovation and Digital Economy: The development of an innovation area to connect new firms with education and public investment could support the growth of high value-added sectors.
• Leverage Excess Savings: Andorra has large excess savings, reflected in a very high current account surplus, which can be used to support future growth.
• Utilize EU Opportunities: The EU Association Agreement could unlock opportunities for reforms, FDI inflows, and cross-border collaboration on research and innovation.

Conclusion

Andorra's income growth has been limited over the past 50 years due to its reliance on low value-added sectors and lower investment and productivity. To reverse this trend, the country needs to focus on structural reforms, diversification, and the development of higher value-added industries. Peer countries demonstrate that a strategic approach to economic development, supported by policy credibility and an enabling environment, can lead to significant income growth. Andorra has the potential to achieve similar outcomes by addressing its bottlenecks and leveraging its unique advantages as a microstate.