Swiss president forecasts deficits of 3 billion francs in coming years

investing.com 26/01/2025 - 08:12 AM

Higher Budget Deficits Projected in Switzerland

GENEVA – Switzerland’s President and Finance Minister Karin Keller-Sutter forecast higher annual budget deficits of around 3 billion Swiss Francs ($3.31 billion) in the coming years due to increased military spending and pension costs, she stated in an interview with Swiss newspapers.

Historically, Switzerland has maintained balanced budgets, but began reporting larger deficits starting in 2020 owing to additional costs linked to the COVID-19 pandemic. The projected deficit for 2024 is 2.6 billion Swiss Francs, according to a government website.

Keller-Sutter noted, “In total, there is around 2 billion Francs that were not budgeted for in the 2026 budget.” She added that while there is additional income from profit taxes, it cannot fully offset the financial requirements, referring to the high profits reported by Geneva-based commodity trading houses in 2022 and 2023.

Swiss voters approved an increase in pension payments last year, despite government warnings that it might be financially unsustainable. The neutral country is also enhancing its defenses in response to the Ukraine war, which includes purchasing new fighter jets, missile systems, and establishing new data centers to bolster cybersecurity.

Keller-Sutter, who recently began her rotating one-year presidency, explained that the government is crafting consultation documents for new banking regulations following last month’s inquiry into the Credit Suisse collapse. She mentioned that the regulations may empower regulators to impose fines on banks and individuals, as well as implement claw-backs on banker bonuses.

When asked if these measures would prevent future government bailouts, she replied that there are no guarantees, stating, “We in Switzerland…have to do our homework (on banking regulation). But one shouldn’t claim 100% security.”

($1 = 0.9057 Swiss francs)




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