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Day: 8 May 2024

Monaco’s Constitutional Reserve Fund: What is it and how much is it worth?

by: Elsa Carpenter
08/05/2024
Constitutional Reserve Fund

As of the end of 2023, the value of Monaco’s ‘nest egg’ Constitutional Reserve Fund exceeded €7 billion for the first time in history. 

The Constitutional Reserve Fund (CRF) was created by the Constitution of 1962. As explained by IMSEE, this ‘nest egg’ is an autonomous accounting entity, with its own assets, and enjoys a special status.  

It is made up of three distinct sets of assets: a gold reserve; liquid assets such as financial investments and bank balances; and illiquid assets, including property in Monaco as well as in neighbouring municipalities and state-owned shares and holdings.  

The CRF has grown exponentially over the last decade, rising from just over €4.5 billion in 2014 to a staggering €7 billion in 2023.  

It grew by an impressive 8.4% between 2022 and 2023 alone, an amount equivalent to more than €500 million. 

The illiquid portion of the fund experienced the largest increase in value in 2023. Around half of this section, roughly €2 billion in value, is composed of buildings, which provide a source of revenue through their rental incomes, while a further €1.7 billion is attributed to the state’s holdings and shares in companies such as Monte-Carlo Société des Bains de Mer and concessionaires including the Société d’Exploitation du Grimaldi Forum, the Société d’Exploitation des Ports de Monaco, the Société Monégasque de l’Electricité et du Gaz and the Société Monégasque des Eaux. 

This section of the fund grew by 11% over the course of last year to amount to more than €4.35 billion. 

The liquid portion of the CRF also increased in value by 3.6% in 2023. By the end of the year, it accounted for over €2.3 billion of the fund’s assets. 

Monaco’s gold reserves now worth €343 million 

The value of Monaco’s gold reserves has been steadily increasing for some time, but experienced a significant 9.9% boost in value during 2023.  

According to Monaco’s Department of the Budget and the Treasury, the Principality’s gold reserves are now worth in excess of €343 million.  

Read related:

Monaco Government launches compulsory GDP survey for all economic actors in the Principality

 

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Well-balanced books: Budget surplus widens in Monaco

by: Elsa Carpenter
08/05/2024
monaco

For the third consecutive year, state revenues outstripped spending in Monaco in 2023, bringing the budget surplus to almost €130 million. 

A new report by Monaco Statistics, also known as IMSEE, on Public Finances in Monaco in 2023 has identified a budget surplus of close to €130 million, with growth in state revenues significantly outpacing expenditures.  

2023 was the third year of a consecutive budgetary surplus after the budget deficit of more than €100 million in 2020, a year heavily affected by the Covid pandemic. 

In 2022, the surplus sat at an already comfortable €32.2 million, but the data from 2023 shows a vast 292% jump to a budgetary surplus of €126.3 million.  

State revenues neared €2.2 billion last year – an increase of 6% equivalent to €124.5 million on 2022’s figures. 

According to IMSEE, the rise can be attributed to the “€232.8 million growth in tax revenues, including commercial transactions”. 

Figures from Monaco’s Department of the Budget and the Treasury indicate that commercial transactions provided more than 50% of state revenues in 2023, up more than 15% on the previous year. Despite falling by almost 25% from 2022 to 2023, real estate – understood as all income from state-owned rental properties and public car parks – contributed just over 15%. Commercial profits, such as corporate income tax, and legal transactions accounted for 10.6% each.  

More than 40% of spending attributed to public works  

Expenditures also cleared the €2 billion mark, for the second year running, though the increase in spending was more moderate than the growth of state revenues.  

From 2022 to 2023, spending increased by just 1.5%, or €30.3 million.  

“This is mainly due to the €88.5 rise in public intervention expenditures,” reads the IMSEE report. “Operating expenses also increased, by €54.8 million.” 

Sovereign expenditure, spending related to the Palais Princier de Monaco and the Sovereign House, rose by a nominal 1.1% to €50.6 million.  

Capital investment spending and expenditure on public services, such as street cleaning, waste collection, public lighting and public transport, fell by 11.5% and 5.4% respectively.

Equipment and investment, a category covering spending on “major works, equipment and acquiring building [as well as] road, cultural, port, urban development, public health, social, administrative and sports projects”, accounted for more than 40% of expenditure. 

Read related:

Overall foreign trade grows to €3.7 billion, but trade deficit widens as exports fall

 

Join the Monaco Life community – sign up for the Monaco Life newsletter, follow our Podcasts on Spotify, and check us out on Threads, Facebook, Instagram, LinkedIn and Tik Tok.   

 

Photo by Monaco Life