VATICAN CITY - The Vatican said Saturday it ran a deficit in 2008 as its finances and donations from across the world were hit by the global economic crisis.

The Vatican posted a budget deficit for a second straight year, though the figures improved strongly from 2007. The Holy See's 2008 deficit was around euro0.9 million ($1.28 million), compared with a loss of euro9.06 million a year earlier.

The financial report released Saturday by the Holy See's press office listed revenues of euro253.9 million and expenses for euro254.8 million.

Most of expenses went to support the activities of Pope Benedict XVI and the Holy See's offices, especially Vatican Radio and other media divisions, the report said.

It said the separate administration of the Vatican City state was particularly hit by the economic crisis. High costs to restore the Vatican's cultural treasures and ensure security left the tiny state with a euro15.3 million deficit, after closing 2007 with a euro6.7 million gain.

The Vatican said annual donations from churches worldwide, the so-called Peter's Pence, were down to almost $75.8 million from $79.8 million in 2007. Leading donors were faithful in the United States, Italy and Germany.

The pope uses the fund to help churches in poor countries and other charitable causes.

The Vatican has published the annual report since 1981, when Pope John Paul II ordered financial disclosure as part of his efforts to debunk the idea that the Vatican is rich.

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(This version CORRECTS UPDATES with details; corrects larger loss was in 2007, not last year.)

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