Long isolated and impoverished, mountainous Andorra has achieved considerable prosperity since World War II through its tourist industry. An estimated 9 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. 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.