2018年-IMF国际货币组织全球_Republic_of_San_Marino_Selected_Issues_11页_404kb

Summary of Selected Issues on the Republic of San Marino

Core Content

This report outlines the fiscal challenges facing the Republic of San Marino, particularly in the context of increasing public debt due to financial sector interventions. It provides an analysis of debt dynamics, considers debt sustainability, and suggests a medium-term fiscal strategy to address these challenges.

Main Points

A. Background

• San Marino has a history of prudent fiscal management, with fiscal surpluses ranging from 1 to 3 percent of GDP before 2008-09.
• These surpluses were used to build government deposits and maintain low gross debt (around 15 percent of GDP).
• During the global financial crisis, these buffers were used to support the economy, leading to a moderate increase in public debt to 20 percent of GDP.
• In 2016, public debt stood at 23 percent of GDP, which was significantly lower than the euro area average of 79 percent.
• Public debt is expected to rise due to the recapitalization of the state-owned bank Cassa di Risparmio della Repubblica di San Marino (CRSM), which had a 2016 loss of €536 million.
• The government plans to amortize this loss over 25 years, with €54 million addressed in 2016 and the remaining €480 million to be handled over time.
• Public debt is primarily financed by long-term loans, with around 75 percent of the debt stock being long-term, and 20 percent as net account payables.

B. Considerations for Debt Sustainability

• A high debt level could limit the government's ability to respond to economic shocks and support growth.
• Debt sustainability can be maintained if accompanied by a credible adjustment plan to stabilize the debt-to-GDP ratio.
• The appropriate debt target depends on factors such as economic growth and financing costs.
• San Marino's limited market access makes it more vulnerable to "sudden stops" in financing, thus emphasizing the need for a cautious approach.
• The IMF applies different thresholds for debt distress: 85 percent of GDP for Advanced Market Economies (AEs) and 70 percent for Emerging Market Economies (EMs). However, these thresholds may not be directly applicable to San Marino due to its untested market access.

C. Scenario Analysis

• The baseline scenario (Scenario 1) assumes the government will cover the full loss of CRSM, leading to a public debt ratio of 57 percent of GDP in 2017.
• If contingent liabilities from tax credit conversions materialize, the debt ratio could rise to 70 percent of GDP.
• Additional shocks, such as lower growth or higher funding costs, could push the debt ratio as high as 90 percent of GDP.
• The analysis highlights the uncertainty surrounding the final fiscal costs and the potential impact of various shocks on the debt path.

D. Developing a Fiscal Strategy

• San Marino needs a medium-term fiscal strategy to manage rising public debt and rebuild fiscal buffers.
• The debt-to-GDP ratio is expected to rise to 55–90 percent, which is significantly higher than previous levels and well above other European microstates.
• Interest payments are projected to increase to 4–13 percent of government revenue by 2020, which is a substantial burden.
• Rebuilding government deposits as fiscal buffers is crucial, as they have declined from eight months of spending in 2009 to less than one month in 2017.
• A fiscal strategy should aim to contain the debt-to-GDP ratio and rebuild government deposits, with specific targets and adjustments required to achieve these goals.
• The report provides an illustrative table showing the fiscal consolidation needed to reach various debt and deposit levels by 2022, highlighting the impact of different scenarios on the required adjustments.

E. Conclusions

• San Marino faces new fiscal challenges due to financial sector interventions.
• The debt-to-GDP ratio is expected to rise significantly, and the eventual level remains uncertain.
• The government's commitment to cover the CRSM loss will increase the debt ratio by around 30 percent of GDP.
• Contingent liabilities from tax credit conversions add further uncertainty.
• A medium-term fiscal strategy is essential to contain the debt-to-GDP ratio and rebuild fiscal buffers, ensuring long-term fiscal sustainability and resilience.

Key Information

• Public Debt in 2016: 23 percent of GDP, significantly lower than the euro area average of 79 percent.
• CRSM Loss: €536 million in 2016, with €54 million addressed in 2016 and the remaining €480 million to be amortized over 25 years.
• Contingent Liabilities: Estimated at €300 million, which could be triggered by banks converting tax credits into government bonds.
• Fiscal Adjustments: Required to stabilize the debt-to-GDP ratio and rebuild government deposits, with scenarios showing the need for consolidation ranging from 0.4 to 8.9 percent of GDP.
• Growth and Interest Rates: Projected nominal growth of 2.9 percent in 2018, and an average interest rate of around 2 percent.
• Fiscal Buffers: Government deposits have declined to below one month of spending, raising concerns about fiscal resilience.

Tables and Figures

Table 1: Estimated Fiscal Cost of Banking Sector Repair

Figure 1: Fiscal Position and Public Debt

• San Marino's public spending and revenue relative to GDP were lower than those of euro area countries.
• In 2016, both revenue and expenditure were around 20 percent of GDP.
• The 2016 budget deficit was 0.3 percent of GDP, much lower than the euro area average.

Figure 2: Debt Path Under Various Shocks

• The debt path is sensitive to various shocks, including lower growth, higher interest rates, and contingent liabilities.
• A one standard deviation decrease in growth could raise the debt ratio to 65 percent of GDP.
• A 300 basis points increase in funding costs could raise the debt ratio to 55 percent.
• A combined shock could push the debt ratio to as high as 90 percent of GDP.

Conclusion

The report emphasizes the need for San Marino to develop a robust fiscal strategy to manage the increasing public debt and ensure long-term fiscal sustainability. It provides a range of scenarios and considerations for maintaining debt at a sustainable level, highlighting the importance of fiscal buffers, growth support, and careful debt management.