Swiss federal accounts close CHF1bn better than budgeted

Federal accounts close one billion better than budgeted Keystone-SDA

The Swiss government has ended the year with a surplus of CHF300 million ($389 million) instead of the expected deficit of CHF800 million, more than CHF1 billion better than forecast.

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The improvement is largely down to temporary extra revenue from Geneva. However, the Federal Council, Switzerland’s executive body, is urging caution and warning against reading too much into the result.

Despite last year’s small surplus, the government’s finances remain under pressure, it said in a statement on Wednesday. Structural deficits of between CHF2 billion and CHF4 billion are still expected for 2027 and 2029, even with the cost‑cutting package currently before parliament and the planned VAT rise earmarked for the armed forces and security.

According to the Federal Council, the CHF900 million in cuts approved by the Senate – the first chamber to examine the controversial savings package – mean that the 2027 budget is no longer balanced. After updating projected revenues and spending, the government now expects a structural deficit of around CHF400 million. The House of Representatives’ committee in charge will discuss its own proposals for the bill at the end of the week.

If parliament, and later voters, back the Federal Council’s proposed 0.8‑point VAT rise to fund the armed forces and security, the federal budget would be “temporarily balanced” in 2028, the government said. But from 2029, a structural deficit of around CHF800 million is expected to reappear.

+ Swiss oppose VAT increase to fund army, says poll

According to current projections, without a VAT rise the Federal Council expects a deficit of around CHF700 million in 2028, widening to CHF1.8 billion in 2029. The government says that, because spending will have to be more tightly prioritised, it is already clear that several digitalisation projects will not progress as quickly as planned.

Translated from German by AI/sp

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