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| ITALICA NEWS |
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| IMF: San Marino’s economy to grow 1 % in 2016 |
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| [ Italica ] – San Marino is emerging from a six-year recession. Its economy stabilised and a 1 per cent growth is expected for 2016, the International Monetary Fund forecasts in its concluding statement of the 2016 Article IV Consultation. The recapitalization plan for Cassa di Risparmio della Repubblica di San Marino (CRSM) should be conservative and further dilution of non-state shareholder would be desirable. Besides, appointing high profile experts is strongly recommended in order to ease the reorganisation process. Despite the current large stock of nonperforming assets which is ‘a drag on banks’ profitability and inhibits their capacity to intermediate and extend new credit’ – IMF argued – the close coordination between the government, the Central Bank of San Marino (CBSM), and the banks is key for a successful strategy to clean up banks’ balance sheets. The IMF delegation pointed out that San Marino should make further efforts to rebuild the fiscal buffers that served well during the crisis. From 2017, its fiscal strategy should focus on taking down expenditure by a fourth of the GDP, and, at the same time, slightly increasing revenues. This could also be reached through the scheduled introduction of the Value Added Tax (VAT) in 2017. Besides, the concluding statement highlights that a modest rationalisation of expenditure on public pensions and benefits through a reform of the public pension system would ensure the long term stability of the system as a whole. Moreover, the IMF welcomed San Marino’s efforts to improve and further enhance international cooperation. In particular, the conclusion of bilateral economic cooperation agreement with Italy and the opening of negotiations with the European Union on an association agreement are considered a major achievement. [ March 17, 2016 – Italica News from Italy and San Marino ] |
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