The Covid-19 pandemic plunged Switzerland’s budget into the red in 2020 and 2021. The federal government expects to return to normality with a balanced budget in 2022.
On 30 June 2021, the Federal Council approved the outlines of a federal budget for 2022 and a financial plan for the period from 2023 to 2025.
The balanced 2022 budget follows two years of pandemic-induced negative results.
By the end of June 2021, the federal government had approved nearly CHF 40 billion of spending on matters related to the Covid-19 pandemic. Most of this has been spent on unemployment benefits and business support.
In 2022, the federal government expects to spend CHF 0.6 billion less than it collects.
Future revenues will benefit from a boost from the Swiss National Bank (SNB), which has generated a large profit from the rising value of the assets on its large balance sheet.
The government expects to receive CHF 77.1 billion in taxes in 2022. The Confederation’s main sources of receipts are developing well, especially value added tax and direct federal tax, said the Federal Council in a press release.
CHF 1.2 billion of expenses related to the pandemic are included in the 2022 budget. These funds are earmarked mainly for vaccines.
According to Switzerland’s debt brake rules, an annual deficit of CHF 0.6 billion is permissible cyclically due to economic capacity underutilisation. However, the pandemic has breached this rule.
To bring the national debt back into line with the rule the federal government aims to run an annual surplus of CHF 2.3 billion from 2023. An extra CHF 1.3 is expected annually from the profits of the SNB. In addition, the government is aiming for an ordinary operating surplus of CHF 1 billion. Past budget surpluses may also be applied to the accumulated deficit to bring the accounting into line with the debt brake rules.
The federal government thinks it can implement its financial plan without an austerity programme.