San Marino’s economy continues to show resilience and positive momentum, according to a statement from International Monetary Fund (IMF) staff following their 2025 Article IV mission. The IMF team noted that the country’s new growth model has helped it withstand recent economic shocks. Prudent fiscal management and progress in banking sector reforms have contributed to reducing longstanding vulnerabilities.
However, the IMF warned that challenges remain for San Marino. The report highlighted concerns about macroeconomic stability, high public debt levels, and significant contingent liabilities. The staff emphasized the need for larger fiscal buffers and further consolidation efforts. “Safeguarding macro-economic stability, still high public debt, and significant contingent liabilities require larger-than-usual fiscal buffers and further fiscal consolidation,” the statement read.
The country experienced accelerated growth in 2024 with GDP rising by 1.0 percent after a previous slowdown. This was largely due to strong domestic demand supported by a robust labor market, real income gains, and lower interest rates. Manufacturing output normalized after post-pandemic peaks while the service sector benefited from increased tourism and solid domestic activity.
Looking ahead, the IMF projects stronger growth in 2025-26 driven by recovering external demand as well as continued domestic strength. Real wage increases, improved financial conditions, and political stability are expected to boost private investment and consumption. However, external risks such as trade tensions and commodity price volatility remain elevated.
On the fiscal front, San Marino outperformed expectations in 2024 thanks to prudent spending controls and one-off revenues from state-owned enterprises and direct taxation. Despite this improvement, pressures on spending are set to rise in 2025 due to expanded private transfers and increased public sector hiring. While the debt-to-GDP ratio is declining—it stood at 62.8 percent of GDP—it remains high compared to peers.
The IMF recommends additional fiscal consolidation of about 0.8 percent of GDP over two years to reduce financing risks and ensure that public debt continues its downward trajectory: “San Marino is an euroized small open economy with a vulnerable financial sector and limited fiscal buffers… prudent macroeconomic policies are key to boosting investors’ confidence.”
Long-term pension system sustainability remains a concern despite reforms enacted in 2022 which delayed fund depletion by increasing contributions. The IMF suggests further adjustments such as recalibrating benefits or retirement age along with continued diversification of pension fund investments.
Improving debt management is another priority area identified by the mission team who recommend smaller international issuances with longer maturities as well as granting more autonomy to the Ministry of Finance for implementing financing plans.
In banking, improvements have been seen in liquidity and asset quality but legacy issues persist. The Asset Management Company (AMC) has exceeded expectations on asset recovery—by mid-2025 it had repaid €41.7 million out of €70 million government-guaranteed senior tranche—helping reduce fiscal contingent liabilities.
The report also calls for continued enhancements to San Marino’s anti-money laundering framework following legal updates made in 2023 that aligned with EU directives: “San Marino should continue enhancing the accuracy of its central beneficial ownership registry.”
Implementation of the EU association agreement will require an ambitious reform agenda particularly within financial regulation where increased resources for oversight authorities like CBSM will be needed: “This underscores the necessity of strengthening the financial autonomy of CBSM.”
Broader structural reforms aimed at raising productivity—including greater labor market flexibility, real estate market improvements, energy efficiency measures, digital upgrades, tax modernization—are recommended as priorities for sustaining long-term growth.
The IMF concluded its visit by thanking local authorities for their hospitality during discussions related to these findings.