Swiss Budget Deficit For 2023 Lower Than Expected

Lower Deficit

In June Swiss government said that it foresees a deficit of CHF4.8 billion for this year and as much as CHF6.7 billion for 2024. The reason for such drastic deficit for this and next year were supposed to be extraordinary spendings on Ukrainian refugees and the electricity sector. However, this Wednesday the government of Switzerland has revised down its estimates by cutting the extraordinary expenditures by CHF4.5 billion.

Cutting Spending

The less than expected debt will be due to the fact that a rescue mechanism for the electricity industry would “not be needed as things currently stand”, as per government’s announcement. Also, the Swiss government plans to cut its welfare budget spent on refugees from Ukraine by more than a third. It said it now expects some 66,000 arrivals from Ukraine for the year, down from the 100,000 accounted for in its budget. Additionally it foresees boost to the public budget from the gradual selling off of the Ruag defence contractor plus a CHF61 million windfall due to risk premiums connected to the massive state support of the Credit Suisse merger with UBS. However there will be also some losses mainly the one resulting from lack of profit redistribution made by the Swiss National Bank. The SNB recorded CF132 loss last year and thus it won’t give any money to Swiss government or cantons. The SNB has been recently focused on fighting off inflation that went above the range target, and helping CHF exchange rate to stay strong as it aid to curb inflation. Due to lack of redistribution a CHF2 billion drop in receipts was recorded by the federal government.