A surprising closure
The Government of Andorra has completed the budget year of 2024 with a remarkable surplus of 46 million euros, a figure that exceeds the result of the previous year 23 million euros, which closed with a positive balance of 23 million euros. This increase has been unexpected, as the initial forecasts provided for a deficit of 33 million euros.
Increased income: determining factors
The revenue collection has experienced a 16% increase over the previous year, with an additional 90 million euros. The Minister of Finance, Ramon Lladós, said that this good result was a reflection of the increase in economic activity, which has exceeded expectations. “The economy has evolved better than we had foreseen in our initial stages,” he said.
Review of IMF forecasts
The estimates of the International Monetary Fund also adjusted to the leave, foreseeing a growth of between 1.8%and 2%, when Andorra has reached a real growth of 3.4%. Lladós explained that this increase in revenue results in a greater financial capacity for the administration.
Expenses and Investments: Prudent management
Although the administration’s expenses have increased by 10% compared to the previous year, with an investment of 35% more, the end result has been a surplus of 46 million euros. “Some works have not been as expensive as we expected,” Lladós explained about the management of capital costs.
Tax collection: a significant increase
Income from direct taxes has grown from 90 to 107 million euros. This increase is due to a combination of factors, including an increase in business benefits. In the case of indirect taxes, the consumer rate has gone from 87 to 112 million euros, partly thanks to the increase in tobacco rates.
Impact of rates on tobacco
Lladós mentioned that, although in 2023 it was a weak year in the collection of tobacco, the situation has improved in early 2024, and the rates were increased in May, thus contributing to the increase in revenue.
Debt status: a downward trend
Government debt has stood by 31.8%, a figure that has been reduced year after year since pandemic. Andorra currently has a slightly lower debt level than 2019, which was 32.7%. “We have managed to increase the collection without increasing taxes,” said Lladós.
Comparing with European neighbors
Lladós compared Andorra’s results with those in other countries, emphasizing that Spain closed the year with a deficit of 2.8% of GDP, while Andorra has obtained a surplus of 1.2%. “This management positions us favorably compared to our neighbors,” he concluded.
A look into the future
With a budget that has exceeded expectations and rigorous management of resources, the Government of Andorra is preparing to face new challenges with optimism, betting on a model of sustainable and responsible growth.
