The International Monetary Fund commends the Republic of San Marino for the maneuvers undertaken in support of the financial system and the resilience of the economic fabric to the pandemic
At the end of its annual mission pursuant to art. 4 of its Statute, the International Monetary Fund, in the person of its Head of Mission Borja Gracia, released some statements to the press this morning, anticipating the contents of the final report that will be in the coming months. On behalf of the Government, the Secretaries of State for Finance and Budget, Marco Gatti, Luca Beccari for Foreign Affairs and Avv. Catia Tomasetti. The analysis of the state of the San Marino economy, with meetings involving the main political and social actors of the area over the course of two intense weeks of work, revealed a positive and encouraging picture. Borja Gracia underlined the “resilience” of the Titan in the face of the pandemic challenge and the effectiveness of the vaccination campaign, in which the Republic of San Marino was the world leader in terms of speed and population coverage. In particular, the package of policies aimed at supporting the economic fabric was particularly appreciated: the expansion of the redundancy fund, the moratoriums and the extension of tax deadlines to support the liquidity of the private sector, all the crucial steps to avoid bankruptcies. , mass layoffs and to maintain trust in the system. Exports, imports, domestic consumption, employment and government revenues are now above pre-pandemic levels.
The Monetary Fund has forecast economic growth of 5.5% this year, followed by 3.7% next year, so as to reach the pre-pandemic level of GDP in the coming months. Ambitious steps were also highlighted to address the problems of the banking sector inherited from the past – in particular the consolidation of the Cassa di Risparmio’s balance sheet, the recent approval of the law on banking paper, the intensification of efforts in terms of supervision by BCSM, the revocation of the license of Banca Nazionale Sammarinese (BNS), formerly Banca CIS, and its conversion into a public asset recovery body – which have helped to strengthen confidence considerably, as demonstrated by the recent increase in deposits. Foreign debt was also widely discussed, undertaken by San Marino with the issue of its first State Bond which was useful in providing significant resources to the budget to support the economic sectors most affected by the pandemic. The challenges for the future in this sense of ambitious budgetary measures, which allow the achievement of economic sustainability, to be undertaken thanks to an intense program of reforms: pensions, VAT, taxes, labor market, of the Public Administration. Finally, the Statement acknowledged the efforts made by the Government to resolve the country’s problems, underlining an important turning point and discontinuity with the past. Here are some parts of the statements of the participants.
Marco Gatti (Secretary of State for Finance and Budget): “In recent meetings we have examined what the government has done in this year and a half and the effects that the measures taken have had on the San Marino economy. A complex period, because the extraordinary element of the pandemic was added to the ordinary factors, which had an important influence on San Marino as well as on all world economies. After a first week of conference meetings, we are pleased to host the delegation of the Monetary Fund in attendance, which allowed an in-depth study of the economic policies that the Republic of San Marino will have to face. In general, I am pleased with what has emerged and that the political response to the need for intervention has been adequate, allowing the resilience and subsequent growth of the country, with a positive vision for the future. We have reasoned together with new challenges and an intense reform program: social security, VAT, direct taxes, the labor market and the Public Administration. Important challenges that, if caught promptly and adequately, favor the growth path undertaken and mitigate the risks that the global economy brings with it. The Government’s commitment now is to follow up on what has been discussed ”.
Borja Gracia (Head of Mission International Monetary Found): “We are happy to be guests of the Republic of San Marino again, following the pandemic. First of all, I want to thank all the institutional protagonists for the fruitful dialogue they had during this week. All the aspects mentioned are listed in detail in the final report. The foundations for a strong economic recovery have been laid, thanks above all to an efficient vaccination campaign, but there are still challenges to be faced in order for the country’s potential growth to be maintained at a high level. From this point of view, it is important to stock up on the greater liquidity that the banking system has been able to obtain, by adopting as soon as possible the reforms necessary to make the budget sustainable. The Republic of San Marino entered international markets for the first time, enjoying significant success. We believe this aspect is a further incentive to move swiftly with the reform calendar. San Marino now faces a great opportunity to increase its international reputation and achieve greater stability and growth ”.
Katia Tomassetti (President of the Central Bank of San Marino): “I am proud of the work done over the last 12 months. The key word of the meetings these days was “dialogue”. The commitment is to continue this virtuous path and find ourselves here next year in an even better situation ”.
Luca Beccari (Secretary of State for Foreign Affairs): “We are perfectly aligned with the vision of the IMF. The paradigm has changed today and must continue to do so, in the wake of achieving the objectives of stability and sustainability, freeing up resources to increase the level of investments. We must be able to plan our actions with a longer horizon ”.