Switzerland’s federal accounts ended 2020 with a record-breaking deficit of CHF 15.8 billion. The deficit was caused by the pandemic.
An unexpected CHF 3.6 billion fall in revenue combined with net CHF 12.5 billion in largely unplanned expenses combined to take the overall result CHF 16.1 billion below the expected positive net result of CHF 0.3 billion to deliver a deficit of CHF 15.8 billion for the year.
Pandemic-related expenditure amounted to CHF 14.7 billion in 2020. The largest expenditure items were partial unemployment working compensation (10.8 billion) and COVID-19 loss of earnings compensation (2.2 billion).
Initial forecasts included an extra CHF 31 billion of federal government spending rather than CHF 14.7 billion. However, the economic downturn in 2020 turned out to be less severe than expected.
Another negative year is expected in 2021. However, in 2022, 2023 and 2024 the federal government expects to breakeven or make it into positive territory.
The deficit caused net debt to rise by CHF 15.5 billion in 2020. After an accounting adjustment to non-administrative assets, gross debt rose by CHF 6.7 billion to CHF 103.7 billion. Switzerland’s debt to GDP ratio is 14.8%, however this figure excludes debts at cantonal and municipal levels.
Between 1990 and 2019, Switzerland’s largest federal budget deficit was CHF 7.8 billion in 1993. The deficit in 2020 (15.8 billion) is more than double this sum.