Vatican shows $78 million budget deficit, releases report on investments
July 26, 2021
The Vatican reported a deficit of €66.3 million ($78.29 million) for 2020, in balance sheets made public on Saturday, July 24.
At the same time the Vatican also— for the first time— provided a full balance sheet for the Administration of the Patrimony of the Apostolic See (APSA), the body that handles investments and functions as the treasury for the Holy See.
The operating deficit for 2020 was far greater than the €11 million shortfall for 2019, but compared favorably with the record €75 million deficit from 2018.
Father Juan Antonio Guerrero Alves, the prefect of the Secretariat for the Economy, pointed out that the Vatican had braced for a deficit anywhere in a broad range from €65 to €146 million, because of the uncertainties of a year marked by the Covid epidemic. The actual shortfall was closer to the most optimistic range in those grim predictions. Father Guerrero reported that budget cuts had helped to staunch the flow of red ink.
However, the figures also showed some continuing negative trends, including a 18% drop in proceeds from the Peter’s Pence collection, taken up annually to sustain the work of the Roman Pontiff. Contributions to the worldwide collection had fallen more than 20% in the previous five years.
Vatican revenues for 2020 were badly hit by the Covid lockdown, which blocked the flow of visitors to the Vatican Museums and other sites that ordinarily generate substantial revenue. The Vatican estimates that the lockdown cost nearly $18 million in income from tourist activity.Decline in profits on investment
The report from APSA, which handles the Vatican’s substantial investment portfolio, showed a profit of just under €22 million ($25.8 million) for 2020. However, that figure was dramatically down from the €73.21 million ($86.45 million) profit of the previous year.
Bishop Nunzio Galantino, the president of APSA, said that the unprecedented 30-page report from the Vatican’s equivalent of a central bank was “a step forward in the direction of transparency.” The Vatican has been striving to bolster the confidence of potential donors, in the face of revelations about questionable investments.
Bishop Galantino said that the drop in APSA income for 2020 was also caused primarily by the Covid lockdown, along with the “changing behavior of the securities market.”
The APSA reports showed that Vatican’s large investment in real estate, with nearly 5,000 properties— primarily in Italy but also in other European countries. Only a small minority of those properties are rented at market rates; most are occupied by Catholic institutions or Church employees, who are given favorable terms.
Bishop Galantino also disclosed that APSA is shifting its investment strategy to build up “pockets of precautionary liquidity” in case sudden downturns in the market force the sale of investments.Deficits to continue?
The release of the budget figures on a Saturday in July suggests that the Vatican was, understandably, not looking for maximum media coverage of a story about budget deficits. The Vatican press office did not post a report on the budget presentations in its daily bulletin.
In February the Vatican released budget figures for 2021 which point to a continuing deficit, projected at about €49 million ($58 million) for 2021.
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- Challenges in time of pandemic: APSA publishes its balance sheet (Vatican News)
- Guerrero: 2020 was a difficult year, but better than expected (Vatican News)
- Vatican closes 2020 with shortfall, but better than forecast (AP)
- Vatican reports $78 million deficit, also releases APSA report (CNS)
- Vatican increasing ‘liquid’ assets as it faces financial impact of pandemic, economic officials say (CNA)
- Vatican reveals property holdings for first time in transparency drive (Reuters)
- Vatican budget projects $60 million deficit (CWN)
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