The economy of the Vatican is an improbable hybrid: a micro-state of just 110 acres that bankrolls the worldwide governance of the Roman-Catholic Church.
Revenue
Most of the money that keeps the Holy See’s bureaucracy moving still comes from the faithful. The annual Peter’s Pence appeal, a collection taken up in parishes around the world, raised a little over €50 million last year, an 11 per cent rise that broke a run of pandemic-era decline. Diocesan subsidies, especially from Germany and the United States, add tens of millions more. Together, these donations cover roughly a quarter of the Holy See budget.
Tourism, however, is the closest thing the Vatican has to an export industry, and here the numbers are striking. In 2024 the Vatican Museums welcomed about seven million visitors and booked ticket and souvenir sales approaching $100 million, revenues now back at pre-COVID levels and likely to surge during the 2025 Holy Year of Jubilee.
A third stream is investment income, overseen by the Administration of the Patrimony of the Apostolic See (APSA). The Lateran Treaties of 1929 handed the papacy a cash settlement and a bundle of Italian government bonds; over the ensuing decades that seed capital was diversified into a conservative portfolio of equities, bonds and – above all – bricks and mortar. APSA today controls more than 5 000 properties, but only around one in seven is let at market rent, a reminder that mission often trumps margin.
Spending
On the expenditure side, the Vatican looks more like a mid-sized public department. About sixty per cent of outlays go on wages, pensions and the running costs of the Roman Curia, a workforce of some three thousand lay employees plus several hundred clergy. The Dicastery for Communication alone costs about €40 million a year – more than the entire diplomatic corps – and has recently been told to expect cuts.
Diplomacy and pastoral aid swallow a further third of the budget. Maintaining nunciatures in more than 180 countries is expensive, as is supporting fragile local churches in the Sahel or the Amazon. Then there are genuinely charitable disbursements – disaster relief, refugee aid, hospital subsidies – which vary with global need and papal priority.
The arithmetic rarely balances. According to internal figures seen by Reuters, the combined accounts of the Holy See showed a deficit of €83 million in 2024, despite a rebound in museum takings. Worse, the pension fund is running a structural shortfall of some €631 million.
The Financial Machinery
At the centre of the system sits the Institute for the Works of Religion – universally known as the Vatican Bank. The IOR is not a retail bank; its 15 000 clients are dioceses, religious orders and Vatican departments. It reported a profit of €30.6 million on assets of roughly €5.4 billion last year, passing €13.6 million straight to the Pope’s charitable budget. Since 2022 a papal decree has compelled every Vatican office to hold its accounts there, greatly tightening cash oversight.
APSA, the treasury and landlord, manages the patrimonial investments. A failed London luxury-property venture led Pope Francis to strip the Secretariat of State of its investment autonomy and hand the assets to APSA, whose statements are now published annually. Together with the Secretariat for the Economy, an external auditor and the Vatican’s own financial-intelligence unit (ASIF), the curial landscape begins to resemble that of an ordinary state, in theory at least.
Reform
That landscape is new. For most of the twentieth century the Vatican’s finances were an opaque realm of handshake deals and princely discretion. The Banco Ambrosiano collapse of 1982 – in which Vatican officials were embroiled and which cost Rome $244 million in reparations – prompted only modest clean-up. The decisive push came from Benedict XVI, who invited Europe’s Moneyval inspectors inside the Leonine Walls and wrote the Holy See’s first anti-money-laundering code.
Pope Francis pressed still harder. He created a lay-led Council for the Economy, hired PwC to audit the books, shut almost five thousand dubious IOR accounts and, in a symbolic blow, cut cardinals’ pay by ten per cent, twice, as part of a “zero-deficit” agenda. Moneyval’s 2024 report now describes the Vatican as possessing a “functioning AML/CFT system”, albeit one that must prove itself with more court convictions.
Yet deficits persist, and the resistance is real. Shortly before his final illness, Francis was still battling sceptics over further belt-tightening and seeking fresh income via a new Commission on Donations. He has warned that without extra revenue the Holy See could be forced to curb its charitable and diplomatic reach.
Scale and influence
Strip away the mystique and the Vatican’s finances are modest. Its entire income a rounding error on the balance-sheet of a tech giant. But influence is not a function of size. A papal appeal after an earthquake can mobilise dioceses and charities to raise sums the Curia itself could never muster. Diplomatic soft power, rooted in moral authority, allows a budget smaller than Monaco’s to shape debates on debt relief or climate change.
The Economic Agenda for the Next Pope
Whoever emerges from the conclave will inherit a balance-sheet cleaner than at any time since the Lateran Pact, but also a model that is structurally cash-flow-negative. Four options dominate the internal briefing papers:
- Commercialise more of the property portfolio by charging market rents.
- Shrink the payroll further, especially in media and administration.
- Raise large-scale philanthropic gifts through the new donations commission.
- Divest non-strategic assets to create an endowment whose earnings can cover the missionary deficit.
Each route carries political and pastoral risks. Raise rents too sharply and religious congregations are squeezed; cut staff and the Vatican’s cultural and diplomatic output diminishes; court philanthropists and the Pope risks moral strings attached.