by The latest forecast for 2021 shows a deficit of CHF 14.8 billion, down CHF 2.6 billion from an earlier forecast shortfall of CHF 17.4 billion. The deficit is driven mainly by the extraordinary cost of responding to the Covid-19 pandemic. © Ginasanders | Dreamstime.comThe federal government expects to spend CHF 4.1 billion on vaccines (1.2) and tests (2.5) in 2021. However, the largest share of extra spending is on full and partial unemployment benefits (6.9). Another CHF 4.8 billion has been spent supporting businesses and cultural organisations and CHF 0.6 billion on transport. The key differences between the earlier forecast deficit of CHF -17.4 billion made in June 2021 and the one of CHF -14.8 billion published are lower than expected ordinary spending (+0.4) and lower
Topics:
Investec considers the following as important: Business & Economy, Editor's Choice, Personal finance, Politics, Swiss federal budget 2021
This could be interesting, too:
Investec writes Swiss National Bank to issue new money
Claudio Grass writes Gold climbing from record high to record high: why buy now?
Investec writes End of lifelong widows’ pensions moves closer to reality
Investec writes Swiss government deficit shrinks further
The latest forecast for 2021 shows a deficit of CHF 14.8 billion, down CHF 2.6 billion from an earlier forecast shortfall of CHF 17.4 billion. The deficit is driven mainly by the extraordinary cost of responding to the Covid-19 pandemic.
The federal government expects to spend CHF 4.1 billion on vaccines (1.2) and tests (2.5) in 2021. However, the largest share of extra spending is on full and partial unemployment benefits (6.9). Another CHF 4.8 billion has been spent supporting businesses and cultural organisations and CHF 0.6 billion on transport.
The key differences between the earlier forecast deficit of CHF -17.4 billion made in June 2021 and the one of CHF -14.8 billion published are lower than expected ordinary spending (+0.4) and lower extraordinary spending related to the pandemic (+1.9). In addition to these changes are a small forecasted increase in tax receipts (+0.2) and extraordinary income (+0.2).
The federal government is now counting on extra income of CHF 1.5 billion, up from CHF 1.3 billion forecast in June. Much of this (+1.3) is a payment from the Swiss National Bank (SNB), which has generated significant profits on it large holdings of assets. The SNB has been busy buying assets with newly minted Swiss francs as part of its efforts to rein in currency appreciation. Many of the assets it holds have gone up in value. Receipts from VAT and stamp duty have also risen.
The extra tax receipts relate to higher VAT revenue (+0.3) and higher stamp duty (+0.2), offset by lower tax receipts in other areas (-0.2).
More on this:
Government press release (in French) – Take a 5 minute French test now
For more stories like this on Switzerland follow us on Facebook and Twitter.