Vatican reports first budget surplus after years of deficits

VATICAN CITY - The Vatican closed 2024 with a budget surplus of €1.6 million (S$2.4 million), it said on Nov 26, signalling a turnaround after years of deficits that had frustrated Church leaders, including the late Pope Francis.

In its first budget report since 2022, the Vatican said it had seen a “significant recovery” in its accounts in 2024, thanks mainly to higher donations and strong investment gains.

It said it had managed to cut the structural deficit – the gap between ordinary revenues and ordinary expenses – by 50 per cent, but acknowledged that this still amounted to €44 million, underscoring the long-term financial challenges facing Pope Leo.

“The report highlights a clear improvement and, while prudently recognising that full financial sustainability is a long‑term goal, a clearly positive direction can be observed,” a press statement said.

Pope Francis, who died in April, had long struggled to get the Vatican’s budget under control.

He was battling firm resistance from his own cardinals in his last months as he sought to plug the gap in the Vatican’s finances, and slashed cardinals’ salaries three times from 2021 to 2024.

Although the Vatican had not published its accounts in three years, the last set of accounts, approved in mid-2024, included an €83-million shortfall, two sources told Reuters at the time.

Reuters was not able to verify the previous deficit figure independently.

The Vatican, a microstate within Rome, has limited fiscal options. It does not issue debt, sell bonds, or levy taxes.

The Vatican has three main income streams. It takes donations, it has an investment portfolio, and it makes money from admissions to the Vatican Museums. It also owns the Bambino Gesu Pediatric Hospital in Rome, which is a source of revenue.

Report does not address pension fund liability

The Holy See said revenues rose by €79 million in 2024, driven by external donations and income from its hospital in Rome, while expenses increased by €40 million.

Financial management delivered €46 million in “positive results”, boosted by capital gains from the sale of historical investments following the launch of a new investment committee.

“This performance... (played) a key role in covering the operating deficit,” the statement said.

“2024 could be a turning point if, after years of stable or growing operating deficit, the Holy See (continues) the reduction of its operating deficit in the coming years,” it said.

“It is important to underline that this improvement is mainly due to an increase in donations,” it said. “It will be necessary to confirm this progress in the coming years.”

The new report does not include data about the growing liabilities within the Vatican’s pension fund, which were estimated to total some €631 million by the Vatican’s finance chief in a 2022 media interview.

The liabilities are believed by insiders to have ballooned since. REUTERS