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Fitch Ratings has affirmed Andorra’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB’

Fitch Ratings has affirmed Andorra’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB’. The Outlook is Positive.

A full list of rating actions is at the end of this rating action commentary. https://all-andorra.com/fitch-ratings-has-affirmed-andorra-s-long-term-foreign-currency-issuer-default-rating-idr-at-bbb/

KEY RATING DRIVERS

Andorra’s ratings reflect the following key rating drivers:

The country’s wealth, relatively strong public finances and political stability are balanced by the economy’s small size (estimated USD3 billion in 2017), the risks associated with a large banking sector and poor economic data availability and frequency.

Public indebtedness is falling, reflecting small deficits at central government level, and improved growth dynamics. Fitch estimates that in 2017 general government debt fell below 40% as a share of GDP for the first time since 2012, reaching 37.6% (compared with a ‘BBB’ median estimate of 40.7%). We expect the debt ratio to fall further, to 34.6% by end-2019. The sovereign’s balance sheet is enhanced by a large stock of liquid assets in the social security sector (around 45% of GDP).

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