The growth of the Andorran economy for the period 2022-2027 shows figures higher than those registered by the neighboring economies, France and Spain, and the average of the countries of the European Union, except for the comparison with the expected progress of the gross domestic product (GDP) of the Spanish economy for 2023. Thus, Andorran GDP grew by 9% in 2022 and for the following years until 2027 increases of 0.8, 2.8, 3.1, 2, 2 and 1.8%.
The forecast of the evolution of the GDP for said period is based on the modeling of the Andorran gross domestic product based on the expected growth in the surrounding economies, for which forecasts are available from the International Monetary Fund (IMF). In the different modeling carried out, a better adjustment to real variations is verified than to rates in nominal terms, based on the selection of a set of estimated models.
In order to have the 2022-2027 forecasts of GDP growth in nominal terms, an implicit deflator of Andorran GDP was generated for the same period, counting on the forecasts of the implicit deflators of the surrounding economies in the same period and estimating the values plausible figures of the implicit deflator of Andorran GDP for the cited period according to the weight represented by the two closest neighboring economies. Thus, all of these forecasts are based on the fulfillment of two hypotheses: that the structural relationship between growth in Andorra and that of France, Spain and the euro zone is maintained and that the growth forecasts for France, Spain and the EU are correct.
On the other hand, the forecast of the behavior of inflation in Andorra in the period 2022-2027 stipulates average annual growth below the European average, except for the percentage forecast for 2024. In 2019 annual inflation stood at 1 percent. hundred. In 2020 the CPI registered a deflation of 0.2%. As of 2021, the growth of the economy began to be noticed after the stoppage of the pandemic and the year closed with an increase of 3.3 percent in the CPI. The inflationary trend experienced its peak last year (it closed in Andorra with a rise of 7.1%) as a result of the behavior of housing prices and services such as water, gas, electricity and other fuels due to the beginning of the war between Russia and Ukraine. The forecast for 2023 with respect to the annual average establishes inflation in Andorra of 4.7%, one point less than that forecast in the euro zone.
The projections prepared for the annual average of the consumer price index of the Andorran economy between last year and 2027 are based on the CPI forecasts for the environment provided by the IMF last October. Likewise, annual data from neighboring countries and macroeconomic data from the Eurozone are analyzed to estimate the parameters of the forecast model.
