Swiss Govt Cut Budget Deficit Projection; Swiss Export Back to Pre-Covid Levels05 November 2021
The Swiss federal government has cut its projections for 2021 budget deficit to 14.8 billion Swiss francs. Meanwhile Swiss export is back to pre-pandemic levels.
Lower Budget Deficit
The Swiss federal government has announced on Wednesday, November 3rd, that it changes its projection for 2021 budget deficit. It was cut from foreseen in June 17.4 billion Swiss francs to 14.8 billion Swiss francs (around 16.15 billion US dollars as per latest average exchange rate). The change is due to the fact that it now estimates less money would be spent on measures to relive the negative influence of the Covid-19 pandemic for businesses. Now it foresees spending of 16.6 billion Swiss francs, instead of 18.7 billion Swiss francs projected in June. Money is mainly spent on wage replacement schemes, emergency loans for companies hit the most by the Covid-19 crisis. New projection for the budget deficit means that 2021 figure would be a bit narrower than budget deficit in 2020. Last year the deficit was at 15.8 billion Swiss francs. The Swiss government had to revise up its spending back in August, as revenue from the negative rates it charges on state debt wouldn’t meet the expected levels. Then last month, the govt has announced it would also raise less money this year from selling government bonds than what was previously expected. In June the federal govt has announced that a structural surplus’ outlook is at 0.6 billion Swiss francs.
Swiss Export and Import Are Doing Better despite very good euro exchange rate
Meanwhile, in other good news for the Swiss economy, export and import are doing much better. Swiss export has come back to the pre-pandemic levels. It reached a new high of 63.11 billion Swiss francs (60.81 billion euros at a current euro rate of 1.055) in the third quarter of this year, driven by the good performance of chemicals and pharmaceuticals industries, as the Federal Customs Administration (FCA) published data. This means there is increase of 3.7% or 2.5% adjusted to inflation, comparing to the previous quarter. Exports have been back to the level before the Covid-19 pandemic since the first quarter of this year. In export, apart form chemicals and pharmaceuticals, very well are doing watches and precision instruments industries, that were up by 3.6% and 4% respectively in Q3 2021. They hit record levels. Import also was up, hitting point over 50 billion Swiss francs, which is over 47.39 billion euros at the current euro franc exchange rate. But still, it is 2.5 billion Swiss francs below the record level from the third quarter of 2019 – before the pandemic. As a result, the trade balance reached a historic level with of 12.56 billion francs in quarterly surplus.