Vatican City - THE Vatican, the headquarters of the Roman Catholic church, returned to the black last year after three years of losses as rising stock markets and property prices boosted its economy.
The Holy See, which has an all-male population of 921 and is headed by Pope Benedict XVI, made a total profit of €3.1 million (£2.1 million) in 2004 on estimated revenue of about €210 million, compared with a loss of €9.5 million in the previous year.
The 2004 accounts were released yesterday. However, the Holy See, which comprises a 0.44 sq km enclave in Rome, is highly secretive about its accounts, revealing the bare minimum in a statement.
The Vatican, the population of which quadruples every morning with the arrival of about 3,000 lay staff, also revealed that it made a €6.1 million gain last year from rises in its stock and bond portfolio. This compares with a loss of €11.6 million in 2003. “This (rise) can be attributed to the improvement of the situation of the financial markets which occurred in the course of 2004,” the Vatican said. The property division also benefited from rising rents.
The centre of Roman Catholicism, which has about about one billion members, received €73.3 million in donations from religious institutes, dioceses and individuals — exactly the same amount as in 2003.
Booming property prices also gave a boost to the Vatican, the property portfolio of which recorded a net gain of €24.9 million, which it said could “be attributed mostly to the appreciated value of some real estate”.
However, the Vatican’s media empire — which includes Vatican Radio and L’Osservatore Romano, a daily newspaper — saw its losses increase by about €3 million to €4.3 million.
The Vatican, which is predominantly peopled by Italians and Swiss and has no natural resources, receives additional income from selling stamps, coins, medals, souvenirs, publications and from entrance fees.
The financial woes of the Vatican had been a source of concern and the return to profit will come as a relief to the new Pope.
Observers had been concerned that the Vatican, which runs more than 100 diplomatic missions around the world, would be forced to cut down on overseas travel if it continued to lose money.
A return to the black will also help to bolster the Church’s infrastructure, particularly in Africa and Latin America, where the religion is growing rapidly.
Analysts said that the Church was also continuing to suffer from sex abuse scandals that came to light under Pope Benedict’s predecessor, John Paul II.
According to Fadica, the American Catholic donor association, contributions from the United States have fallen by about 10 per cent since those scandals broke two years ago. However, the estimated $700 million (£400 million) that American churches have paid in compensation to victims does not directly affect the Vatican, which has separate accounts.
Observers believe that Pope Benedict needs to be more transparent about the Church’s finances if he is to rebuild faith among US members and, in turn, donor contributions.
The Vatican recorded eight consecutive years of profits in the 1990s as soaring stock markets and property prices boosted its bottom line. It was hit by three years of weak markets after the bursting of the dot-com bubble in 2000.
CITY STATE
# World’s smallest state
# Population: 921
# Population growth rate: 0.01 per cent
# Coastline: landlocked
# Natural resources: 0
# Religion: Roman Catholic
# Ethnic Groups: Italian and Swiss
# Languages: Italian and Latin
# Government type: ecclesiastical
# Gained independence: February 11, 1929
# Currency: euro
# Head of State: Pope Benedict XVI