Swiss Federal Budget for 2022 to Close with Surplus

Planned Surplus

               Swiss federal government has issued its 2022 federal budget and it foresees a structural surplus of 0.6 billion Swiss francs (around 649 million US dollars as per latest average exchange rate). For 2023 its plan sees a structural surplus of 0.4 billion francs, meanwhile for 2024 a deficit of 0.1 billion francs and again a surplus of 0.1 billion francs in 2025. Next year the surplus will be due to higher payouts from the Swiss central bank, that would balance the higher spending connected to pandemic – of  1.2 billion francs. “After two years of the budget being impacted by high COVID-19 expenditure, there are signs of a return to normal also in terms of fiscal policy,” the government said after a meeting. Later this year the federal government plans to ask Swiss parliament later for further expenditure to boost the tourism, transport, health, sectors as they struggle with the impact of COVID-19. In February the federal government said it would seek a balanced budget in forthcoming years after this year there is a record deficit due to putting a lot of money to economy in times of crisis. Finance Minister Ueli Maurer said coronavirus aid debt was likely to be about 25 billion Swiss francs. Maurer stated there are plans to repay this debt over years without having to turn to drastic measures such as taxes hike or cutting on spending.

Surplus Also at SNB’s Budget due to low EUR CHF exchange rate

               Recently also the Swiss National Bank informed about its financials, claiming after first quarter of 2021 there is a surplus of 16 billion Swiss francs (around 17.40 billion US dollars as per latest exchange rate). This means 6 billion francs more than in Q4 2020. “The rise was mainly attributable to two factors. First, goods trade recorded a significantly higher receipts surplus than in the same quarter of 2020. Second, the expenses surplus in secondary income declined due to the decrease in claims expenditure by private insurance companies,” the SNB said in a statement. The central bank’s assets increased by 260 billion Swiss francs, outweighing the spike in liabilities of 160 billon Swiss francs. As the exchange rate of CHF is now weaker versus the dollar, the value of assets held denominated in USD is higher when translated back to CHF. This led to an increase of 100 billion Swiss francs quarter to quarter in Switzerland’s net international investment position, that hit 761 billion francs. “On both sides the rise in stocks was due to exchange rate effects – especially towards the end of the period, the U.S. dollar was considerably higher against the Swiss franc,” the SNB said, while adding: “This had a particularly strong impact on the assets side due to the high proportion of foreign currencies.” The increase in liabilities was due to valuation gains on Swiss stock market. Apart from foreign currency investment, the increase was observed on foreign exchange rate holdings and bonds held by the SNB.