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Europe > San Marino, Republic of

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Cover IMF Staff Country Reports
Principality of Andorra: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Principality of Andorra
International Monetary Fund. European Dept.
Andorra’s small open economy continues to grow above potential driven by external demand and a prospering financial services industry. Inflation is edging upwards after a period of moderation amidst a labor market operating near full employment. Cautious fiscal management continues to drive overall budget surpluses and reinforce fiscal buffers. Banks are profitable with ample capital, however, the size of their consolidated assets – at more than 5 times GDP – presents a systemic risk. The war in the Middle East will weigh on growth and put upward pressure on inflation in the near term while challenges including low productivity, lack of affordable housing, capacity limitations, and impact of climate change on winter tourism will put downward pressure on growth over the medium term and aging will strain public finances. The European Union Association Agreement (EUAA) offers the opportunity to deepen the integration into the EU’s single market and diversify Andorra’s sources of growth, but there will be transition costs and the exact timeframe for ratification remains uncertain. Reforms to the public pension and healthcare systems are needed to make them sustainable.
Keywords:
euro banknote; Andorra's legal tender; euro coin; collector coin; right of Andorra; Inflation; Fiscal stance; Middle East
Cover IMF Staff Country Reports
Republic of San Marino: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper evaluates the state of economic and export diversification in San Marino, a high-income small state with a manufacturing-heavy economy. Using sectoral Gross-Value-Added data and export diversification metrics—Herfindahl-Hirschman Index, Entropy Index, and Export Concentration Ratio—derived from mirror trade data, the study benchmarks San Marino against peer economies. While San Marino’s economy seems concentrated in manufacturing and wholesale trade at the aggregate sector level, more disaggregated product level data shows that its export structure is well diversified given the country’s size and development level, despite more recent trends suggest a slight decreasing in diversification. The analysis confirms a U-shaped relationship between diversification and income, indicating that high-income economies like San Marino may not further benefit from more diversification. These results suggest that horizontal structural policies—rather than sector-specific industrial policy—to supporting high-value-added products within currently competitive sectors, as well as to high-productivity growth sectors with economy-wide synergies, like information communication technology, are the most relevant to sustain productivity growth while maintaining resilience through diversification.
Keywords:
sectoral distribution; IMF country; small economy; staff team; Entropy Index; Exports; Export diversification; Manufacturing; Global; Africa; Baltics
Cover IMF Staff Country Reports
Republic of San Marino: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of San Marino
International Monetary Fund. European Dept.
The 2025 Article IV Consultation discusses that San Marino’s economy maintains positive momentum. Its diversified growth model proved to be resilient to shocks. Growth is higher than expected, and fiscal primary balance is strong. Continuing reforms underpinned further reduction in banking sector vulnerabilities, however, significant challenges remain. Notwithstanding recent fiscal overperformance, additional consolidation is essential to mitigate financing risks, build fiscal buffers, and ensure the debt-to-gross domestic product ratio continues to decline. Key priorities include implementing income tax reform, containing the public wage bill, and improving public spending efficiency. External downside risks prevail, driven by uncertainty. Domestic risks stem from financial sector legacy issues. On the upside, faster implementation of the EU association agreement could lift growth. Financial sector reforms should be further advanced to improve asset quality, increase capitalization, and accelerate banks’ cost structure adjustments. Structural reforms, needed to boost economy-wide productivity, should be prioritized, including those aimed at the implementation of the EU association agreement.
Keywords:
staff report; finalized reform; progressive tax credit; staff statement; staff appraisal; Financial sector; Income and capital gains taxes; Fiscal stance; Global; Europe
Cover IMF Staff Country Reports
Republic of San Marino: 2024 Article IV Consultation-Press Release and Staff Report
International Monetary Fund. European Dept.
The 2024 Article IV Consultation discusses that San Marino’s economy has remained resilient, with economic activity stabilizing at high levels and record employment, despite the regional slowdown and high interest rates. Growth has slowed due to weakening external demand but remains positive as the decline in manufacturing activity has been offset by strong performance in the service sector. With easing financing conditions and the stabilization of external demand, growth is expected to pick up gradually. Inflation has declined to below two percent and it is expected to remain at low levels. The fiscal position is stronger than expected. The government has saved the cyclical tax revenues, kept expenditures in check, and achieved strong primary balance in 2023. Structural reforms are critical to lift potential growth. The conclusion of the EU association negotiations, which signals strong commitment to deeper integration with the EU, is welcome. The successful implementation of the agreement is a priority to enhance productivity and the authorities should ensure sufficient resources and staff are available to support implementation without undermining the fiscal consolidation path.
Keywords:
Sta balance of payments statistics; article IV consultation discussion; Sta government finance statistics; Sta GDDS metadata development; currency of San Marino; Fiscal stance; Nonperforming loans; Pension spending; Global; Europe
Cover IMF Staff Country Reports
Republic of San Marino: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper compares Sammarinese banks with nearby Italian banks with similar business models, highlighting gaps in asset quality, capital adequacy, and cost efficiency. Individual banks can boost profits by reducing the high operating costs and increasing the share of income-generating assets. If within bank consolidation is insufficient to restore competitiveness, system-wide consolidation can be considered to achieve economies of scale. It is key to improve the competitiveness of the banking sector well-ahead of the 15-year time frame granted by the EU association agreement. The analysis shows most San Marino banks need to catch up in terms of asset quality, capital adequacy and cost efficiency. A system-level consolidation can be considered. The banking sector remains oversized. The number of bank branches needs to be reduced by more than two thirds to reach the EU level. The share of income-generating assets should also be increased.
Keywords:
Nowcasting GDP; NOWCASTING tool; businesses' expectation; association agreement; DFM approach to Nowcasting; A. comparing San Marino bank; San Marino bank; Small and medium enterprises; Income; Manufacturing; Commercial banks; Global
Cover IMF Staff Country Reports
Panama: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper discusses unravelling Panama’s large unemployment fluctuations. Panama’s labor force and employment have increased remarkably over the last decades. The rapid labor force growth was driven by a combination of demographic and social transformations. The increase in the labor force participation rate was the result of rising female labor force participation. Panama’s income convergence in the 25 years preceding the Pandemic was in large part the result of an increase in the employment to population rate. Convergence can either result from an increase in the employment rate relative to that in the US, or from faster labor productivity growth. In the case of Panama, about three quarters of the reduction in the income differential with the US was driven by an increase in the employment to population rate, and only one quarter was the result of faster labor productivity growth. Going forward, the increase in the employment to population ratio is likely to be slower and, for income convergence to continue, productivity growth will need to accelerate. The demographic transition has largely run its course as population growth is projected to keep declining and the share of the working-age population is expected to decrease in the next decades.
Keywords:
B. Dollarized economy; labor market market trend; D. labor force; E. building RESILIENCE; unemployment fluctuation; Climate change; Deposit insurance; Labor force; Natural disasters; Financial safety nets; Caribbean; Central America; Global; South America; Europe
Cover IMF Staff Country Reports
Republic of San Marino: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of San Marino
International Monetary Fund. European Dept.
The 2023 Article IV Consultation discusses that despite external shocks and higher interest rates, growth has remained resilient in San Marino. Prudent policies and access to international capital markets increased policy buffers to healthy levels. Despite volatile financial conditions, the government was able to rollover the Eurobond maturing next year. However, San Marino is a microstate subject to very high volatility and financial sector vulnerabilities remain, suggesting that larger-than-usual fiscal buffers are needed. High inflation and higher interest rates are eroding real income and putting pressure on firms’ healthy level of profitability. This, combined with weakening global demand will affect economic activity that while still positive, is decelerating in 2023. Given San Marino’s recent access to international capital markets and associated market discipline, the main priority is to advance the nonperforming loans securitization in a credible way that avoids forbearance and minimizes fiscal risks. This process and calendar provisioning can reveal capital needs at some banks that will need to be promptly addressed. A viable banking system will also require strengthening cost-efficiency and improving the quantity and quality of capital.
Keywords:
Sammarinese authority; authorities of the Republic of San Marino; Sta government finance statistics; utility company; vis-à-vis nonresident; Fiscal stance; Nonperforming loans; Pension spending; Global; Europe
Cover High-Level Summary Technical Assistance Reports
Republic of San Marino: Report on the Financial Soundness Indicators and Monetary and Financial Statistics Technical Assistance Mission
Brian Kwok Chung Yee
and
Darja Milic
This paper presents the report on the financial soundness indicators (FSI) and monetary and financial statistics (MFS) technical assistance mission in San Marino. The mission reviewed and updated the bridge tables that are used to compile the FSIs for transmission to the statistics department (STA). Source data for compiling FSIs for commercial banks are adequate and generally meet the criteria established by the 2019 FSIs Guide for publication in the IMF’s FSI data portal. The mission also recommends updating the metadata accompanying the publication of revised FSIs. Because of the mission, the Central Bank of San Marino should be able to implement the new FSI Standardized Reports, FSI Institutional Coverage and FSI Metadata. The mission also reviewed the treatment of banks in liquidation in the compilation of MFS, particularly the recent case of banks in suspension of payments. A timeframe for reporting new FSI report forms and revised MFS data to STA has also been discussed and agreed on with the authorities.
Keywords:
Financial Soundness Indicators; Monetary and Financial Statistics
Cover IMF Staff Country Reports
Republic of San Marino: 2022 Article IV Consultation-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
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
Cover IMF Staff Country Reports
Republic of San Marino: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of San Marino
International Monetary Fund. European Dept.
San Marino entered the pandemic with substantial vulnerabilities and still struggling from the consequences of the Global Financial Crisis (GFC). However, the economy has shown significant resilience supported by a timely and targeted policy response. Fiscal support was substantially scaled up after external borrowing was secured, including through a debut Eurobond. The banking system was rationalized, partly capitalized, its liquidity substantially improved, and a strategy is being adopted to address exceptionally high nonperforming loans (NPLs). Some of these measures, while effective, have increased official public debt substantially.
Keywords:
banking sector liquidity; Sta government finance statistics; vis-a-vis nonresident; liquidity of the banking system; boosted liquidity; Sta balance of payments statistics; Commercial banks; Fiscal stance; Nonperforming loans; Pension spending; Global; Europe