European Nation Andorra
Why in NEWS ?
- Europe’s Andorra formally joined the International Monetary Fund (IMF) on 16 th October, becoming the crisis lender’s 190th member state as the tourism and trade-dependent principality struggles with the coronavirus pandemic.
- Andorra’s initial quota – the capital subscription that determines its voting power and access to financing – is 82.5 million Special Drawing Rights, or about $116.4 million.
- Andorra faces both short-term and long-term challenges common to European and other IMF member countries which have been aggravated by the (coronavirus) pandemic.
Andorra’s Financial Status
- According to Fitch Ratings, said in July that Andorra would experience a deep recession in 2020, forecasting GDP to contract by 11.4%, with a 50% drop in tourist entries
- Nonetheless, Fitch affirmed Andorra’s BBB+ investment-grade sovereign debt rating, forecasting a return to 4.3% growth in 2021.
- The IMF said trade and tourism comprise close to 40% of Andorra’s economic output, with almost 8 million visitors to its ski slopes and mountain trails in 2019. Financial services account for another 20% of its GDP.
- According to World Bank data, Andorra had a 2019 population of 77,142 and GDP output of $3.15 billion, qualifying it as a “high-income” country.
- While it uses the euro currency, it is not a part of the eurozone or the European Union and does not have its own central bank.
Importance as member of IMF
- As an IMF member, the principality’s government will get an annual review of its economic prospects and policies by Fund staff, technical policy advice and full participation in IMF and World Bank spring and annual meetings.