Introduction to Purchasing Power in Andorra 2024
The purchasing power in Andorra has experienced a significant improvement in recent years, especially reflected in the 2024 living conditions survey. This positive trend is a key indicator for those considering living, investing, or relocating their residence to Andorra, as it directly impacts quality of life and overall well-being.
Increase in Purchasing Power in Andorra
According to the report presented by the government on July 28, 2025, equivalent incomes in Andorra have increased by nearly 35% since 2021, rising from €27,733 to €37,335. This increase is notably higher than the 15.7% growth in the Consumer Price Index (CPI) recorded in the same period.
Factors Driving the Improvement of Purchasing Power
Minister of Presidency, Economy, Labour, and Housing, Conxita Marsol, attributes this improvement to various measures implemented by the government:
- Revision of the minimum wage above inflation.
- Freezing rental prices.
- Free public transportation.
These actions have contributed to a lower percentage of households facing rental cost burdens, decreasing from 17.8% in 2021 to 13% in 2024.
Decrease in Economic Inequality and Poverty in Andorra
Economic inequality has also shown signs of reduction. The S80/20 indicator, which compares the incomes of the richest 20% with the poorest 20%, has decreased from 7.3 to 7.1, indicating a more balanced income distribution.
Improvements in Poverty Indicators
The poverty-related indicators show positive progress:
- The severe poverty rate (incomes below 40% of the median, set at €11,553) has decreased from 7.4% to 4.2%.
- Relative poverty (50% of median, €14,442) has reduced by one percentage point, from 9.8% to 8.8%.
- The severe material deprivation rate has dropped significantly from 7.3% to 5%.
However, the poverty risk threshold (60% of median, (€17,330)) has risen to 16.4%, an increase of 2.8 points compared to 2023. This rise is partly because some individuals have improved their incomes and now fall into this segment.
Comparison of Purchasing Power and Poverty with Neighboring Countries
Compared to Spain and France, the poverty risk threshold in Andorra is higher:
- Andorra: €17,330
- Spain: €11,584
- France: €15,334
Despite this difference, the proportion of the population below the threshold is lower in Andorra at 16.4% versus 19.7% in Spain.
What Does This Improvement in Purchasing Power Mean for Those Wanting to Live in Andorra?
The increase in purchasing power in Andorra reflects a favorable economic environment that can attract new residents, investors, and entrepreneurs. Stability in the minimum wage, along with measures to control housing costs and facilitate transportation, contribute to a better quality of life.
If you’re planning to live in Andorra, this information is key to understanding the current economic context and the opportunities the country offers.
Considerations When Moving to Andorra
- Consultations about the residency regime and legal requirements.
- Relevant tax information at taxes in Andorra.
- Updated cost of living data to plan your family budget.
Conclusion
The purchasing power in Andorra has significantly improved in recent years, with a 35% increase in income since 2021 and a notable reduction in severe poverty and inequality. These improvements reflect the effectiveness of public policies implemented and position Andorra as an attractive destination for those seeking quality of life, economic stability, and investment opportunities.
For more information on how to take the step and relocate to Andorra, visit our section on moving management and other useful resources at Andorraway.