Republic of San Marino: 2022 Article IV Consultation-Press Release and Staff Report

International Monetary Fund

No 2022/349, IMF Staff Country Reports from International Monetary Fund

Abstract: San Marino's economic activity showed remarkable resilience throughout the pandemic. After Russia's invasion of Ukraine, San Marino faced an unprecedented energy price shock which, compounded with a food price shock, led to high inflation and real income erosion. However, strong external demand amidst global supply chain constraints and an elevated inflow of tourists have boosted economic activity so far this year. At the same time, San Marino secured beneficial energy import prices this year and next that have resulted in tariffs below regional peers at minimal fiscal costs. Despite a strong economy, the fiscal position in 2021 remained relatively weak. However, greater reliance on domestic debt along with a large share of long maturing and low interest debt is supporting favorable debt dynamics given higher inflation. Banks' capitalization and profitability improved in 2021, deposits continued to grow, while credit contracted. Progress halted recently while vulnerabilities remain given very large nonperforming assets and weak capitalization.

Keywords: Sta government finance statistics; liability positions vis-a-vis nonresident; Sta balance of payments statistics; price signal; Eurobond rollover; Fiscal stance; Energy prices; Pension spending; Bonds; Global; Europe (search for similar items in EconPapers)
Pages: 68
Date: 2022-11-23
New Economics Papers: this item is included in nep-cis
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