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International Monetary Fund. Statistics Dept.
A technical assistance (TA) mission on external sector statistics (ESS) was conducted for the Andorran Statistics Department (ASD) in the Principality of Andorra in March and April 2022. The mission focused on initiating the compilation of international investment position (IIP) and in producing balance of payments statistics regularly with an improved coverage and quality. The mission also assisted the ASD in developing the new direct reporting system, which will be used as one of the main source data for compiling balance of payments statistics and IIP annually.
International Monetary Fund. Statistics Dept.
A technical assistance (TA) mission on external sector statistics (ESS) was conducted for the Andorran Statistics Department (ASD) in the Principality of Andorra in September 2023. The mission focused on preparing plans to improve the frequency of producing balance of payments statistics and international investment position (IIP) from annual to quarterly and to enhance the coverage and quality of the balance of payments and IIP data. The mission assisted the ASD in establishing the framework of the quarterly enterprise survey, which will be used as one of the main source data for compiling balance of payments statistics and IIP quarterly.
International Monetary Fund. African Dept.
The 2023 Article IV Consultation discusses that The Andorra economy is showing resilience and is growing slightly above its long-term potential despite external headwinds. Over the medium-term, the economy is projected to slow to its lower long-term potential level estimated at 1.5 percent, comparable to average growth in the euro area. Risks to the outlook are balanced and the economy has solid macroeconomic buffers, but there are concerns about emerging structural bottlenecks, such as the lack of affordable housing, labor shortages, and vulnerability to climate change. After a strong growth rebound, structural reforms can raise potential growth and address emerging fault lines. The authorities should maintain tight fiscal policy as long as growth remains close to potential and price pressures are persistent. However, there is fiscal space for higher public investment to support potential growth and mitigate structural bottlenecks. Pension system reform is overdue to secure its long-term sustainability. Ambitious structural reforms to diversify the economy and address emerging bottlenecks are key. These include removing remaining constraints on investment, improving housing affordability, retaining talent, and fostering digitalization and economic efficiency.
International Monetary Fund. African Dept.
This Selected Issues paper focuses on housing affordability in Andorra. This paper shows a granular analysis of housing affordability, exploiting microdata from the Survey of Living Conditions, to identify the groups that are most affected and better inform and target housing policies. Evidence that affordability is lower for renters and that Andorra is a renter-dominated real estate market combines to create a housing affordability issue. Low-income and low-skilled workers are disproportionally affected. This study analyzes the evolution and characteristics of housing demand and supply dynamics in the country, which indicates a supply and demand mismatch in the affordable segment of the Andorran housing market as well as insufficient fluidity, which exacerbates the shortage of short-term rentals and complicates the hiring of foreign workers. A multipronged policy approach is needed, and a careful balance is needed to minimize market distortions while increasing the stock of housing in the medium-term.
Mr. Anil Ari, Philipp Engler, Gloria Li, Manasa Patnam, and Ms. Laura Valderrama
The surge in energy prices due to Russia’s February 2022 invasion of Ukraine significantly increased costs for European firms, prompting governments to introduce a range of support schemes. Although energy prices had eased by early 2023, uncertainty around prices remains unusually large. Against this backdrop, this paper examines the case for government intervention and identifies best practices with a view to improving the design of existing energy support schemes, facilitating exit from those schemes, and preparing policymakers for a downside scenario in which energy prices flare up again. The paper argues that support should be limited in size, strictly temporary in nature, narrowly targeted, and accompanied by strong safeguards and conditionality, while preserving price signals as much as possible to encourage energy conservation. Finally, the paper reviews recent support schemes introduced by European governments in light of the identified best practice considerations.
International Monetary Fund. European Dept.
The Andorran economy is recovering strongly from the pandemic, supported by a rebound in tourism, retail trade, construction, and professional services. Real GDP is expected to reach pre-crisis levels in the second half of 2022. While the unemployment rate is amongst the lowest in Europe and continues to decline, pockets of vulnerability remain. Notwithstanding significant policy buffers, there are still substantial downside risks, notably the impact in Europe of the war in Ukraine, higher than expected inflation, and a resurgence of infection rates.
International Monetary Fund
On June 25, the Executive Board discussed a proposal for a historic US$650 billion general allocation of SDRs to address the long-term global need to supplement existing reserve assets. Following concurrence by the Executive Board on July 8, the Managing Director submitted the proposal to the Board of Governors on July 9 for its approval by August 2. If approved, which requires an 85 percent majority of the total voting power, the allocation would become effective by the end of August. The proposal makes a case for an allocation of US$650 billion (about SDR 456 billion), based on an assessment of IMF member countries’ long-term global reserve needs. It also includes measures to enhance the transparency and accountability in the reporting and use of SDRs while preserving the reserve asset characteristic of the SDR. The general allocation would help many EMDCs that are liquidity constrained smooth needed adjustment and avoid distortionary policies, while providing scope for spending on crisis response and vaccines.
International Monetary Fund
On June 25, 2021, the Executive Board discussed a staff paper setting forth the considerations underlying the case for a general allocation of special drawing rights (SDRs) of an amount equivalent to US$650 billion (about SDR 456 billion) during the Eleventh Basic Period and the key features that could be included in the Managing Director’s proposal for this general allocation.