This Selected Issues paper presents scenarios to assess debt dynamics and discusses key considerations in developing a medium-term fiscal strategy and adjustments.in San Marino. San Marino faces new fiscal challenges. Recent interventions in the financial sector are set to increase the debt to gross domestic product (GDP) level, although the eventual level of public debt remains highly uncertain. The government has granted banks the right to convert tax credits to government bonds, thus creating contingent liabilities. Going forward a fiscal strategy is needed. The scenario analysis in this paper suggests that the debt-to-GDP ratio could rise to 55–90 percent of GDP. Such levels would be high for San Marino and well above the level observed in other European microstates. At the same time, government deposits have been decreasing to a low level. A medium-term fiscal strategy could thus aim at containing the debt-to-GDP ratio and rebuilding deposits. The analysis in this paper offered considerations that could be helpful in determining fiscal adjustments needed to reach such targets.
This 2012 Article IV Consultation highlights that rising unemployment, stagnant wage growth, and lower confidence have all contributed to falling private consumption and low inflation in San Marino. Financial sector balance sheets have continued to compress on the back of steady outflows of deposits. Directors have welcomed the measures taken to contain the 2012 budget deficit but called for a comprehensive medium-term consolidation plan, given growing fiscal risks. Directors have also stressed the need for a deficit-financing plan, which could involve issuing debt instruments on capital markets.
This Selected Issues paper describes the developments and challenges in the financial sector of the Republic of San Marino. The study analyzes the structure of the financial sector, compares the performance of Sammarinese banks with those in other countries, reviews the legal and regulatory environment as well as supervisory practices, and discusses the challenges facing the banking system. The paper also provides the statistical appendix report for the country.
This paper reviews economic developments in San Marino during 1990–94. The country came through the 1992–93 European recession virtually unscathed and took full advantage of the following recovery. Like surrounding areas of Italy, Sammarinese manufacturing and tourism sectors benefited from the depreciation of the lira after September 1992. In addition, the financial sector boomed as political turmoil in Italy caused large capital inflows. In this environment, the unemployment rate—already well below the European average—dropped to 3.8 percent in December 1995.
International Monetary Fund. Secretary's Department
The speeches made by officials attending the IMF–World Bank Annual Meetings are published in this volume, along with the press communiqués issued by the International Monetary and Financial Committee and the Development Committee at the conclusion of the meetings.