The International Monetary Fund published the staff report for its 2025 Article IV Consultation with the Principality of Andorra, finding continued macroeconomic stability and a sound banking sector amid economic transition. The report points to a resilient economy supported by a strong service sector, solid bank performance and robust construction activity. On the financial sector, the report highlights strong bank profitability and resilience and commends the macroprudential buffers required by the Andorran Financial Authority, while calling for continued supervisory vigilance given banks’ systemic importance and their consolidation and international expansion. It also notes that a potential Association Agreement with the European Union could increase domestic competition and support reforms aimed at diversification, investment and productivity, while creating challenges requiring a strategic response, and it stresses the need to keep strengthening the anti-money laundering and counter-terrorism financing regulatory and compliance framework, particularly for virtual assets and cross-border financial flows.
Andorran Financial Authority 2025-04-11
International Monetary Fund publishes Andorra Article IV staff report praising macroprudential buffers but urging vigilance and stronger AML/CFT framework
The IMF's 2025 Article IV Consultation report on Andorra highlights macroeconomic stability and a robust banking sector. It commends the Andorran Financial Authority's macroprudential buffers but advises continued supervisory vigilance due to banks' systemic importance and international expansion. The report notes potential challenges and opportunities from a possible Association Agreement with the EU, emphasizing the need to enhance anti-money laundering and counter-terrorism financing frameworks.