Andorra: economic recovery with added value
As highlighted by various international bodies that analyze the evolution of the international economy, the effects of the global vaccination against Covid-19 are improving expectations of the economic recovery compared to previous forecasts made in late 2020. Unfortunately, not all countries have the same resources, and this difference continues to generate inequality, poverty, and the widespread risk of new outbreaks due to the inevitable international human mobility.
There is unanimity in forecasting a significant GDP growth for the period 2021-2022, at the end of which it is considered that we will have recovered the level of before the pandemic. In this context, Andorra, which (as for Spain and France), has been one of the countries whose GDP has fallen the most during 2020, expects a 5.3% and 5.7% growth for the years 2021 and 2022, respectively. With similar figures, strong GDP growth is forecasted in Spain (5.9% and 6.8%) and in France (5.7% and 4.2%) during 2021 and 2022.
All the indicators are based on the normal evolution of the pre-pandemic economy, and therefore it is forecasted also for Andorra a normalization of GDP growth between 2023 and 2026, falling from 3.2% to 1.2% and similar figures are put forth for the countries around us.
However, Andorra, as a model country, has long been committed to boosting its economy by enhancing its attractiveness as a country open to certain value-added sectors.
It is precisely the pandemic that has consolidated the use of digital media and accelerated the process of implementing it in our daily lives on a personal, professional, or business level. In that way, Andorra has decidedly focused on new technologies and is legislating on digital assets (blockchain, cryptocurrency) and even on e-sports, with the aim of becoming an international reference in these sectors.
Moreover, the pandemic has brought Andorra even closer to the world of research and innovation, since the scenario of the Principality offers a differential value that is hardly comparable with any other European country. This value has captured the attention of high-level international laboratories such as Grifols, which will settle in the country very soon. As agreed with the Government of Andorra, Grifols’s research center will specialize in the development of treatments for disorders of the immune system and will investigate the alterations of biological structures that organisms have to protect us against some diseases. At the new Pyrenees Immunology Research Center in Ordino, immunological research will be carried out to develop new therapies to treat infectious diseases, immunodeficiency, cancer, and auto-immunity, among others. Additionally, aware that such initiative can be a pole of attraction for scientists from around the world and conscious of the opportunity that this represents for our country, the Government of Andorra has decided to merge the different co-existing Research bodies, creating a new one that will constitute a public-private Foundation which brand of reference will be Andorra Research and Innovation. Its main mission will be to attract international interest, strengthening initiatives at all levels with the ultimate goal of transferring knowledge to the productive facilities both inside and outside Andorra.
These are some of the reasons why we can affirm that Andorra will break the forecasts of normalization of economic growth that predict progressively moderate increases in GDP between 2023 and 2026, to be in a higher growth rate, thanks to the added value of its economic model. This “little – big country” still has a lot to surprise the world with!
Augé Legal & Fiscal