Growth moderates during 2023
Josep Maria Mas explained the economic prospects in front of a well-fed audience.
Fernando GalindoUpdated 09/13/2023 at 12:05 p.m
- Julia Rodríguez Andorra la Vella
"The Andorran economy is moderating growth during 2023 as a result of the deterioration of the global situation and the normalization of economic growth, once pre-pandemic activity levels have been recovered." With these words, the president of the Chamber of Commerce, Industry and Services, Josep Maria Mas, summarized the economic prospects for the current year after a 2022 that closed with real GDP growth of 8.8%, a rate five tenths above that recorded in 2021.
2023 will be a year with weak growth on a global scale, to the point that a possible GDP decline in the Eurozone is not ruled out, while the forecast is not very good for neighboring countries either. Thus, as far as France is concerned, everything points to weak growth in its economy, although recession is ruled out, while in Spain the prospects are better, with a GDP increase of more than 2% this year.
The slowdown of the Andorran economy is noticeable, for example, in the number of visitors and imports which, despite growing by 15% and 8%, respectively, until July do not do so to the same extent as the last year. A slowdown in activity is also seen in the year-on-year declines in enrollments and electricity demand, as well as in the more moderate advance of GDP in the first quarter of 2023. In this way, Mas stated that one of the main concerns for the coming months is the loss of dynamism in consumption "due to the impact on demand of inflation and the increase in interest rates, as well as the weakening of the external context", which will continue limiting growth capacity. "The difficulties in finding both basic and qualified labor will be another element of restriction",
On the other side of the scale, tourism will continue to be the main lever for the country's growth, and the neighboring economies, especially the Spanish one, will continue to be an important support factor for Andorra. "All in all, it indicates that Andorran economic growth will be positive in 2023, but lower than the growth of the previous year", concluded Mas. However, there is a "particularly high" degree of uncertainty for the economic forecasts for 2023 and 2024, since "it will depend mainly on how prices evolve" and also on whether the European Central Bank (ECB) will continue to raise the interest rate to moderate the increase in inflation close to 2%.
2023 will be a year with weak growth on a global scale, to the point that a possible GDP decline in the Eurozone is not ruled out, while the forecast is not very good for neighboring countries either. Thus, as far as France is concerned, everything points to weak growth in its economy, although recession is ruled out, while in Spain the prospects are better, with a GDP increase of more than 2% this year.
The slowdown of the Andorran economy is noticeable, for example, in the number of visitors and imports which, despite growing by 15% and 8%, respectively, until July do not do so to the same extent as the last year. A slowdown in activity is also seen in the year-on-year declines in enrollments and electricity demand, as well as in the more moderate advance of GDP in the first quarter of 2023. In this way, Mas stated that one of the main concerns for the coming months is the loss of dynamism in consumption "due to the impact on demand of inflation and the increase in interest rates, as well as the weakening of the external context", which will continue limiting growth capacity. "The difficulties in finding both basic and qualified labor will be another element of restriction",
On the other side of the scale, tourism will continue to be the main lever for the country's growth, and the neighboring economies, especially the Spanish one, will continue to be an important support factor for Andorra. "All in all, it indicates that Andorran economic growth will be positive in 2023, but lower than the growth of the previous year", concluded Mas. However, there is a "particularly high" degree of uncertainty for the economic forecasts for 2023 and 2024, since "it will depend mainly on how prices evolve" and also on whether the European Central Bank (ECB) will continue to raise the interest rate to moderate the increase in inflation close to 2%.
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