San Marino rated “BBB-/A-3” by S&P Global Ratings
The economic situation in San Marino is showing positive signs, as highlighted in the S&P report. The main aspects and considerations for the country’s growth and economic stability emerging from the report are as follows:
- GDP growth: Real GDP growth is expected to reach 1.0% this year and to accelerate further in the coming years, supported by robust domestic demand and a recovery in major trading partners.
- Association Agreement with the EU: S&P has given a positive assessment on the conclusion of the Association Agreement, considered as an important opportunity to improve governance standards and promote economic growth, making the system more integrated and competitive.
- Banking sector: The restructuring of the banking sector through the Asset Management Company (AMC) contributed significantly to reducing non-performing loans (NPLs) from 55% to 24.6%.
- Public debt: Net public debt is projected to decline from 64% of GDP in 2023 to 60% in 2027, assuming no further direct support to the banking system.
All this is a prerequisite to assign BBB-/A-3′ long- and short-term foreign and local currency sovereign credit ratings to San Marino, with a stable outlook. An improvement in the fiscal position could lead to a possible rating upgrade, especially if the public debt-to-GDP-ratio falls faster than expected.
In conclusion, San Marino is on a sustainable growth path, supported by structural reforms and the opportunities of European integration. Monitoring the development of the banking sector and public debt management remains crucial to ensure long-term economic stability.