Abstract
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.
FUND RELATIONS
(As of March 27, 2012)
Membership Status
Joined: September 23, 1992; Article VIII
General Resources Account
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 22.40 | 100.00 |
| Fund holdings of currency | 16.95 | 75.66 |
| Reserves tranche position | 5.45 | 24.34 |
| Lending to the Fund | ||
| New arrangements to borrow |
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 22.40 | 100.00 |
| Fund holdings of currency | 16.95 | 75.66 |
| Reserves tranche position | 5.45 | 24.34 |
| Lending to the Fund | ||
| New arrangements to borrow |
SDR Department
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocations | 15.53 | 69.35 |
| Holdings | 15.37 | 68.61 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocations | 15.53 | 69.35 |
| Holdings | 15.37 | 68.61 |
Outstanding Purchases and Loans
None
Latest Financial Arrangements
None
Projected Payments to the Fund
None
Implementation of HIPC Initiative
Not applicable
Implementation of Multilateral Debt Relief Initiative
Not applicable
Implementation of Post-Catastrophe Debt Relief
Not applicable
Exchange Arrangements
Prior to 1999 the currency of San Marino was the Italian lira. Since January 1, 1999, San Marino uses the euro as its official currency. The central monetary institution is the Central Bank of San Marino (CBSM). Foreign exchange transactions are conducted through commercial banks without restriction at rates quoted in Italian markets. There are no taxes or subsidies on purchases or sales of foreign exchange. San Marino’s exchange system is free of restrictions on the making of payments and transfers for current international transactions, except for those maintained solely for the preservation of national or international security and which have been notified to the Fund pursuant to Executive Board Decision No. 144-(52/51).1
Article IV Consultation
San Marino is on a 12 months cycle. The previous Article IV consultation took place during January 4–14, 2011, and concluded on March 14, 2011 (Country Report No. 11/78).
FSAP Participation
A review under the Financial Sector Assessment Program (FSAP) was completed in 2010.
Technical Assistance
| Year | Department/Purpose |
|---|---|
| 1997 | STA Multi-sector assistance |
| 2004 | STA Monetary and financial statistics |
| 2005 | MFD Deposit insurance |
| 2008 | STA GDDS metadata development |
| 2009 | LEG AML/CFT |
| 2011 | STA National accounts statistics |
| 2012 | STA Government finance statistics |
| Year | Department/Purpose |
|---|---|
| 1997 | STA Multi-sector assistance |
| 2004 | STA Monetary and financial statistics |
| 2005 | MFD Deposit insurance |
| 2008 | STA GDDS metadata development |
| 2009 | LEG AML/CFT |
| 2011 | STA National accounts statistics |
| 2012 | STA Government finance statistics |
Resident Representative
None
STATISTICAL ISSUES
(As of March 27, 2012)
Data Provision
Progress has been made since San Marino’s participation in the IMF’s General Data Dissemination System (GDDS) on May 16, 2008 but important weaknesses in the statistical database remain mainly due to resource constraints. In January 2007, in view of their intention to participate in the GDDS, the authorities named two national GDDS coordinators and announced their objective to increase the frequency of website updates in order to improve data dissemination. As of March 2012, national and fiscal accounts, as well as monetary and financial sector data are compiled according to international standards but some key statistics (such as real and fiscal data) are available only with delay and, in many cases, are at a lower than standard frequency and detail.
Real Sector Statistics
National accounts data for 1995 onward have been calculated in accordance with ESA95 and data are compiled annually based on the income approach with about ten months delay. The authorities have also calculated sectoral contribution. However, as part of ongoing STA technical assistance on national accounts statistics, the production and expenditure approaches are adopted instead. Consumer prices and employment data are available monthly with short delay. An industrial production index based on electricity consumption, launched in 2000, became available monthly in 2009. Consumption and business sentiment indexes have been compiled starting 2007 based on annual household and business surveys.
Government Finance Statistics
The authorities have provided data for the central government, state owned enterprises, and social security fund for 2004-11, as well as the budget for 2012-14. However, the data have not been compiled in accordance with IMF standards. The central government budget is still written so as to close at par, which implies that standard financing items, such as amortization, are included as expenditures while “borrowing requirement” is included among the revenues.
Monetary and Financial Statistics
Since 1997, the authorities have provided balance sheet data on the commercial banks and the monetary authorities to STA database. These data are provided on a quarterly basis, with approximately a six-week reporting lag. The authorities have introduced laws and took some measures to improve coverage and timeliness of banks’ reporting. The CBSM has improved sectorization and expanded data collection to cover the offshore asset management activities of banks. The breakdown of deposits (and other assets and liabilities) between residents and nonresidents and the breakdown of short-term credit by public and private sector components are also available. However, there is no broad money survey. Data on non-bank financial intermediaries are also lacking.
External Sector Statistics
San Marino does not compile balance of payments accounts. Given the currency union with Italy and the subsequent introduction of the euro, the authorities have not considered this a high priority and have, therefore, not committed the necessary resources. Starting 2008, trade statistics are released quarterly with a lag of about six months.
San Marino: Table of Common Indicators Required for Surveillance
(As of March 27, 2012)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Authorities do not compile balance of payments data and lack the capacity to provide this information to the Fund.
San Marino: Table of Common Indicators Required for Surveillance
(As of March 27, 2012)
| Date of latest observation | Date received | Frequency of Data5 | Frequency of Reporting5 | Frequency of Publication5 | |
|---|---|---|---|---|---|
| Exchange Rates | 3/26/12 | 3/27/12 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | Q4 2011 | Feb 2012 | Q | Q | Q |
| Reserve/Base Money | Q2 2011 | Oct 2011 | Q | Q | Q |
| Broad Money | Q2 2011 | Oct 2011 | Q | Q | Q |
| Central Bank Balance Sheet | Q4 2011 | Feb 2012 | Q | Q | Q |
| Consolidated Balance Sheet of the Banking System | Q4 2011 | Feb 2012 | Q | Q | Q |
| Interest Rates2 | Q2 2011 | Oct 2011 | Q | Q | Q |
| Consumer Price Index | Jan 2012 | Mar 2012 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 | 2009 | Feb 2012 | A | A | A |
| Revenue, Expenditure, Balance and Composition of Financing3 - Central Government | 2011 | Feb 2012 | A | A | A |
| Stocks of Central Government and Central Government-Guaranteed Debt | 2011 | Feb 2012 | A | A | A |
| External Current Account Balance | NA6 | ||||
| Exports and Imports of Goods and Services | 2010 | Dec 2011 | A | A | A |
| GDP/GNP | 2010 | Dec 2011 | A | A | A |
| Gross External Debt | NA6 | ||||
| International Investment Position | NA6 |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Authorities do not compile balance of payments data and lack the capacity to provide this information to the Fund.
San Marino: Table of Common Indicators Required for Surveillance
(As of March 27, 2012)
| Date of latest observation | Date received | Frequency of Data5 | Frequency of Reporting5 | Frequency of Publication5 | |
|---|---|---|---|---|---|
| Exchange Rates | 3/26/12 | 3/27/12 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | Q4 2011 | Feb 2012 | Q | Q | Q |
| Reserve/Base Money | Q2 2011 | Oct 2011 | Q | Q | Q |
| Broad Money | Q2 2011 | Oct 2011 | Q | Q | Q |
| Central Bank Balance Sheet | Q4 2011 | Feb 2012 | Q | Q | Q |
| Consolidated Balance Sheet of the Banking System | Q4 2011 | Feb 2012 | Q | Q | Q |
| Interest Rates2 | Q2 2011 | Oct 2011 | Q | Q | Q |
| Consumer Price Index | Jan 2012 | Mar 2012 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 | 2009 | Feb 2012 | A | A | A |
| Revenue, Expenditure, Balance and Composition of Financing3 - Central Government | 2011 | Feb 2012 | A | A | A |
| Stocks of Central Government and Central Government-Guaranteed Debt | 2011 | Feb 2012 | A | A | A |
| External Current Account Balance | NA6 | ||||
| Exports and Imports of Goods and Services | 2010 | Dec 2011 | A | A | A |
| GDP/GNP | 2010 | Dec 2011 | A | A | A |
| Gross External Debt | NA6 | ||||
| International Investment Position | NA6 |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Authorities do not compile balance of payments data and lack the capacity to provide this information to the Fund.
EU Regulations are not directly applicable to San Marino as a result of Article 249 of the Treaty Establishing the European Community, but they may well be applied as a result of the legal relationship between San Marino and Italy, acting on behalf of the European Union.