With ticket offices closed, Vatican museums received just €1 million; About 10% of usual income
The coronavirus pandemic has affected the Vatican's finances. The drop in the number of tourists, the closure of museums for almost three months and the reduction in donations from the faithful caused negative consequences for the economy of the smallest state in the world.
The flow of tourists has suddenly decreased since March 10, when the national lockdown was decreed in Italy, which lasted until June 1. Although the end of the lockdown was gradual, tourist activities have not returned to the way they were before.
Today the few people who visit the Vatican They are European, and many are Italian from various parts of the country. Tourists from the United States, Latin America, and Asia, who were once numerous, have disappeared. For centuries, religious travel has always been the main source of economic income for the city, even before Rome became the capital of Italy in 1870.
Sectors affected by the reduction in tourism
Many travelers stayed in religious inns that are now almost empty. The drastic reduction in tourists also damaged commerce around the Vatican. Many stores selling religious items and souvenirs are closed.
Merchants must pay rent to the Administration of the Patrimony of the Apostolic See (Apsa), the Roman curial dicastery created in 1967 under Pope Paul VI, responsible for managing Vatican properties. Apsa has 2.400 apartments and 600 offices and commercial facilities.
In an interview with the French newspaper Le Monde, Bishop Nunzio Galantino, president of the entity, declared that the Vatican helped merchants in difficulty. He said that the cancellation of a third of the rents for the months of March to June was applied, which allowed the payment of another third to be postponed to September 2020 and confirmed the payment of the remaining third within the scheduled period.
Bishop Galatino also highlighted that between March and June, Apsa recorded a loss of almost 30% of rental revenue, that is, €3,8 million, approximately R$23 million.
The Vatican's recipes
The other sources of income are the Vatican Museums and donations from the faithful. The Vatican Museums are self-funded and each year give their profits to the Holy See. With the box office closed from the beginning of March until the end of May, and only 60.000 visitors in June, they raised around €1 million euros (R$ 6 million).
Normally the box office earns around €150 million per year, around €12,5 million per month. Now with the need to maintain physical distancing, the number of visitors admitted is lower.
Traditionally, every year donations arrive from Saint Peter's obol, a system for collecting donations from the Catholic Church, where the faithful offer economic assistance directly to the Pope, for the maintenance of the church and helping charities, it is also collected in the parishes of the around the world on June 29th, the feast of the apostles Saint Peter and Saint Paul.
The Vatican also counts contributions from local churches. The main ones are from Germany and the United States, but these have shrunk in recent years because of sex scandals.
The Vatican's main expenses
In a recent interview with Vatican News, the Holy See's Minister of Economy, the Spanish Jesuit Guerrero Alves, explained the expenses in detail.
Around 5 employees work at the Vatican, their salaries and jobs were maintained, but there were no new hires. Expenses are 45% to pay employees, 45% for general and administrative expenses, the remainder for donations (7,5%) and other residual expenses.
The Vatican pays taxes to Italy, around 6% of the budget, i.e. €17 million. A large part of the expenditure is allocated to the cost of the team that works with communication, more than 500 people. They communicate what the pope does in 36 languages, through radio, TV, the web, social networks, newspapers, printing houses, publishing houses, the press room, a structure that has no equal in the world. Not to mention that the Vatican does not allow advertising funds.
The Vatican's financial balance has not improved. In 2015, the deficit was limited to €12,4 million. For 2020, according to the most recent estimates from June, the deficit is expected to be at least €50 million euros, €320 million in expenditure and €270 million in revenue.
If there is no extraordinary revenue, there will be an increase in the deficit. However, not everything can be measured just as a deficit or as a mere cost in the economy because, as Father Guerrero Alves explained, “the Holy See is not a firm or a company. The Vatican’s objective is not to make a profit.”
A state without GDP
The Vatican is the only state in the world that does not have its own Gross Domestic Product (GDP). Vatican City, a sovereign territory with the Pope as head of state, has its own system of production of goods and services, but due to the peculiarities and limited dimensions of its economy, it is not possible to assign a gross value to the economic activities carried out within local borders or calculate the costs of goods and services consumed there. The Gross Domestic Product index is therefore not applicable to the jurisdiction.
The only products that the Vatican supplies are food produced in small quantities on the properties of Caltelgandolfo, known as “The Pope's Farm”. Food products are sold to the employees themselves for a modest price. The Vatican also sells medals and stamps to the public, but this is not a large production.
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