From 7 to 20 January 2025, the International Monetary Fund (IMF) conducted the first of its Article IV consultations in Liechtenstein, which will now take place annually. Over the course of these two weeks, IMF economists and representatives of Liechtenstein's Constituency held numerous discussions with public authorities, organisations, and companies in the country to familiarise themselves with and assess the national economy.

In addition to a courtesy visit to H.S.H. Hereditary Prince Alois von und zu Liechtenstein at Vaduz Castle, meetings were held with Prime Minister Daniel Risch, Deputy Prime Minister Sabine Monauni, and the secretaries general of all ministries. The discussions included heads of offices of the National Administration, heads and experts from the Liechtenstein Financial Market Authority (FMA) and other organisations such as business associations and research institutions. The programme was rounded off with in-depth talks with Liechtensteinische Landesbank (LLB), LGT, and VP Bank, along with visits to Ivoclar, Oerlikon Balzers, and Hilti.

IMF assesses Liechtenstein's economic situation and warns of global risks

The consultation, which is based on Article IV of the IMF Articles of Agreement and will now take place each year, serves to monitor and analyse the economic and financial policies of all IMF member countries. Particular focus is placed on economic developments, fiscal policy, and financial market stability. At the end of the consultation, a Concluding Statement summarising the key findings and recommendations was published and made publicly available on the IMF website.

In this preliminary report, the IMF experts highlight Liechtenstein's high per capita income, balanced public finances with no public debt, and the country's strong openness and integration into the global economy as positive aspects. Following the crises in recent years, the economy is currently experiencing moderate recovery, with somewhat improved growth prospects in the medium term. However, as in many other European economies, the IMF also identifies several risks to the local economy, including the current global economic slowdown, increased global fragmentation, and a significant appreciation of the Swiss franc.

In the long term, the IMF anticipates rising public expenditure due to an ageing population, climate change, and the need for public investment to sustain the high productivity of Liechtenstein's economy. Accordingly, the current surpluses and a pragmatic fiscal policy with precise financial planning over the medium and long term are deemed particularly important.

The report also places a strong focus on Liechtenstein's financial centre, highlighting in a highly positive manner the country's compliance with international standards and its comprehensive regulatory framework to prevent money laundering and terrorist financing. According to the IMF, adherence to international standards and the implementation of international sanctions regimes remain crucial to sustainably addressing the risks associated with the financial centre's business model. The IMF also positively emphasises Liechtenstein's macroprudential policy, which effectively addresses macrofinancial risks through capital- and borrower-based measures. Similarly, the report acknowledges the efforts made in the area of cybersecurity, where Liechtenstein's authorities have already taken significant steps to mitigate major risks. On the other hand, the IMF identifies gaps in macroeconomic data and statistics concerning Liechtenstein. As previously communicated during the IMF accession process, the Government aims to initiate improvements in this specific area and enhance data availability.

These assessments will now serve as the basis for the comprehensive report, which will provide a more detailed evaluation of Liechtenstein's economic and financial situation and is expected to be published in spring 2025.

Liechtenstein has been an official member of the IMF since 21 October 2024. Its accession was the result of years of preparation and a referendum held on 22 September 2024. The IMF already conducted visits to Liechtenstein during the accession process. The IMF is a specialised agency of the United Nations (UN), founded in 1945. With Liechtenstein's membership, the IMF now comprises 191 member countries. The organisation promotes balanced growth in global trade, exchange rate stability, and the monitoring of monetary and currency policies, while also providing its members with technical assistance and loans in times of crisis.