For the latest updates on the key economic responses from governments to adress the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
San Marino's economy has failed to fully recover since the financial crisis of 2008. Furthermore, deep-rooted weaknesses in the banking sector - the backbone of the economy - coupled with disrupted credit supply have stalled growth in recent years. The COVID-19 pandemic has caused the San Marino economy to collapse, with GDP estimated at -6.7% in 2020. Nevertheless, GDP rebounded by 5.4% in 2021 and continued on a positive path in 2022: according to the latest IMF estimates, growth was estimated to be above 4%, supported by strong manufacturing production and tourism, resulting in activity and employment levels surpassing pre-pandemic levels. However, the country's economy is expected to slow down in 2023 and 2024 due to increased uncertainty, high energy prices, and a weakening global environment (at 0.8% and 1.1%, respectively). There are risks that weigh towards negative outcomes, including geopolitical developments, heightened commodity prices, and volatile financial markets.
San Marino's economy, which is akin to an offshore banking model, collapsed following the introduction of anti-tax measures by Italy and against a backdrop of weak external demand. San Marino's cumulative GDP recession since 2008 is the second-worst in Europe after Greece. While the country was finally removed from the blacklist of tax havens compiled by Italy in 2014, macroeconomic and financial soundness indicators have not improved significantly since that date. The country's oversized banking sector has dwindled and been left with low liquidity as many non-residents withdrew their money. The Republic of San Marino was under strong international pressure to strengthen cooperation with foreign tax authorities and render its banking system more transparent. Rebalancing of public accounts and the fight against money laundering and terrorist financing remain high in the country's priorities. Supported by higher inflation and controlled government spending, revenues were strong, leading to a significant improvement in the primary deficit (excluding bank support) from 2.3% of GDP to almost balanced between 2021 and 2022. To further control expenditures, it will be important to maintain cautious indexation of public wages and pensions in the short term (IMF). However, challenges in the medium term still exist. Although the approved pension reform, which focused on generating more revenue, is a positive step, further adjustments to pension spending will be necessary to ensure the long-term viability of the system. With economic conditions deteriorating and uncertainty increasing, tax policy reforms will be crucial in putting the country's debt on a clear downward trend to guarantee fiscal sustainability and facilitate the renewal of the Eurobond. The country’s debt-to-GDP ratio decreased to approximately 86.5% in 2022 (from 89.2% one year earlier) and is expected to hover around 88% over the forecast horizon. Higher energy and food prices caused a steep rise in inflation (from 2.1% in 2021 to 6.9% last year). The IMF expects the inflation rate to gradually decrease to 4.5% in 2023 and 1.5% the following year.
San Marino has a high standard of living and offers several social benefits, which contribute to the good living conditions of the country's inhabitants. Nevertheless, inflation eroded real incomes in 2022, weakening residents’ consumption (non-fuel consumption fell by 10% in the first half of the year). According to data from the national office of statistics, the unemployment rate stood at 4.14% at the end of 2022. As of 31 December 2022, the total workforce was 23,674, an increase of 463 (+2%) over the previous year. Employees in the private sector were 17,597 and, together with those in the public sector, accounted for 90% of the workforce.
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||1.54||1.75||1.69||1.81||1.85|
|GDP (Constant Prices, Annual % Change)||-6.7||8.3||4.6||1.2||1.0|
|GDP per Capita (USD)||45,641||51,580||49,555||52,950||53,909|
|General Government Gross Debt (in % of GDP)||71.6||86.3||81.2||90.6||80.4|
|Inflation Rate (%)||0.2||2.1||7.1||4.6||2.7|
|Current Account (billions USD)||0.04||0.11||0.07||0.04||0.04|
|Current Account (in % of GDP)||2.8||6.3||4.3||2.4||2.0|
Source: IMF – World Economic Outlook Database - October 2021.
Note: (e) Estimated Data
|Euro (EUR) - Average Annual Exchange Rate For 1 MUR||0.03||0.03||0.02||0.03||0.02|
Source: World Bank - Latest available data.
San Marino's agriculture includes wheat, grapes, corn, olives, cattle, pigs, horses, beef, cheese, and hides.
The country's most important industries are tourism, banking, textiles, electronics, ceramics, cement, and wine. San Marino is also known for its furniture, its collectible stamps, and its collectible coins.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Value Added (in % of GDP)||0.0||35.6||n/a|
|Value Added (Annual % Change)||-13.8||n/a||n/a|
Source: World Bank - Latest available data.
|Socio-Demographic Indicators||2022||2023 (e)||2024 (e)|
|Unemployment Rate (%)||5.5||5.1||5.1|
Source: IMF – World Economic Outlook Database - Latest available data
See the country risk analysis provided by Coface.
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Latest Update: September 2023