Andorra economy, basically an agriculture based economy has progressed to great extend in the recent years. With a per capita GDP of $38,800, Andorra economy ranks 11th in the CIA's list.
Andorra economy includes a small amount of arable land, which is about 2 percent of its total area. Andorra economy is mainly based on agriculture which includes livestock also. Tobacco production is also a major source of income for the Andorra economy. Tourism industry in Andorra is one of the major sources of income. This industry contributes nearly 80 percent of GDP growth. Andorra economy has minimal government spending and taxation. Though cultivation is on low scale in Andorra so most of the commodities are to be imported and hence a structural trade deficit exists. As far as Government finances are concerned they are in stable state.
Growth rates of economy of Andorra are unpredictable. It can be said that in recent years the economic growth rate is in steady condition which is at 3.5 percent as estimated in 2005. The country's fiscal position has improved considerably as was rated "AA" from "AA-" by Standard & Poor's ratings agency. Andorra is also a member of European Union Customs Union and is treated like any other EU member for trade in manufactured goods. Andorra's national income as estimated in 2007 was approximately $3.66 billion, with major contribution from tourism sector.
Vital statistics of Andorra economy
GDP (2007)
$3.66 billion.
Major Natural resources
hydroelectric power, mineral water, timber, iron ore, lead.
Major Agriculture products
Products--tobacco, sheep.
Major Industry
tourism, (mainstay of the economy), tobacco products, furniture.
Official currency
Euro
Consumer goods are actively traded in Andorra. Imports of several manufactured items are one of the major trade activity practiced in Andorra as these items are taxed at lower rates and are less expensive in Andorra as compared to other neighboring countries. Agriculture being the prime source of food in Andorra, apart from this sheep rearing is the major agricultural activity. Tobacco is also grown on large scale. Handicrafts industry is also a major source of income for Andorra economy. Manufacturing industry includes manufacture of cigars, cigarettes, and furniture, which are used in both domestic and international markets.