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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.
International Monetary Fund. Western Hemisphere Dept.

1. San Marino’s economy has been remarkably resilient post-pandemic. However, real income remains well below pre-Global Financial Crisis levels lagging significantly behind other economies that also suffered a banking crisis. The economy has been systematically affected by neighboring Italy’s lackluster performance, but it has also been hampered by problems of its own, with persistent challenges in the banking system and pressing structural constraints.

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.
International Monetary Fund. European Dept.

1. San Marino entered the COVID-19 crisis with large vulnerabilities and struggling to find a new sustainable growth model. With GDP still 25 percent below pre-Global Financial Crisis (GFC) levels (despite a stable population), San Marino faced unresolved challenges in the banking system, weak external demand, and an unfinished structural reform agenda. The economy was still struggling to find a new growth model away from over reliance on the pre-GFC offshore banking model.