FITCH RATINGS IMPROVES THE OTLOOK FOR THE ANDORRAN ECONOMY

Fitch placed Andorra in the long-term rating at BBB level with stable outlook. Standard & Poor's, in the maelstrom of the impact of the case BPA and uncertainties generated about the financial system was fixed and BBB- sovereign rating on negative outlook.

Fitch does a moderately positive assessment of the situation of the national economy, with a light of optimism. Within the overall summary stated that "Andorra is a small country, rich and politically stable" has a rating "underpinned by the strength of the balance of its public sector and a flexible labor market." The worrying aspect is highlighted that "is limited by the small size of its economy and a high concentration of tourism and banking sectors."

The agency assesses that the public debt "is moderate" considering that stood at the equivalent of 41% of gross domestic product (GDP) in 2014. It is evident, however, that from 2006 to 2014 this debt soared considering that eight years spent 15.7% of GDP to 41% mentioned. The predictions regarding the evolution of public debt are positive.

Firstly, Fitch expects 2015 reached a maximum equivalent to 42.7% of GDP to begin to reduce from 2016 "as a result of the consolidation strategy implemented by the Government since 2010" .

The weight of the banking sector.

Fitch highlights the growing importance of the banking sector in the national economy, with assets within organizations representing almost seven times the entire GDP of 2014. As there is no separation between a central bank or banking premises and other business entities, "in case of a systemic banking crisis" the state would be directly affected.

Fitch, if BPA has had only "limited negative impact on the viability of the other three local banks" and "assets of these banks have remained relatively stable, only slightly worse after the crisis." And he adds that "the levels of capitalization and asset quality of these banks are adequate."