Wednesday, July 28, 2010

Economy of Andorra

Economy of Andorra
The economy of Andorra is governed by the tourism industry, which roughly accounts for 80% of GDP. All in all, Andorra is well-to-do state, where over 9 million tourists drop in annually, attracted by the country's duty-free status and its summer and winter resorts. While the banking sector, with its "tax haven" status, contributes substantially to the economy, agricultural production is limited as only 2% of the land is arable and most food has to be imported. The principal livestock activity is sheep raising. Manufacturing output consists mainly of cigarettes, cigars, and furniture.

Andorra economy

Economy—overview: Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 10 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. Andorra's comparative advantage has recently eroded as the economies of neighboring France and Spain have been opened up, providing broader availability of goods and lower tariffs. The banking sector, with its "tax haven" status, also contributes substantially to the economy. Agricultural production is limited by a scarcity of arable land, and most food has to be imported. The principal livestock activity is sheep raising. Manufacturing consists mainly of cigarettes, cigars, and furniture. Andorra is a member of the EU Customs Union and is treated as an EU member for trade in manufactured goods (no tariffs) and as a non-EU member for agricultural products.