Switzerland faces record budget deficit due to COVID-19
Early estimates show that Switzerland will face a record budget shortfall of around 17,4 billion Swiss francs in 2021, after suffering a 14,2 billion deficit in 2020. The COVID-19 pandemic has placed a large financial burden on the country.
The Swiss parliament approved huge spending to tackle the pandemic
The country’s parliament approved a massive 21 billion Swiss franc spending package to help the country restart its economy after lockdown. Much of the money has been spent on supporting workers who have had their working hours reduced, and assisting businesses that were hit hard by the pandemic.
Another significant part of the spending was also set aside for medical aspects of the COVID-19 outbreak. This included purchasing vaccines and medicine, supporting hospitals with medical equipment and large-scale coronavirus testing.
Tax yield is expected to have 2,4 billion Swiss franc shortfall
Switzerland’s tax yield is expected to be 2,4 billion Swiss francs short of the state’s spending requirements, despite there being a rise in tax revenue, especially from business taxes.
The budget estimates could however change if the situation with the pandemic improves throughout the rest of the year, according to a government statement.
Of course, there is also the risk of the opposite: if the pandemic worsens, the budget deficit could worsen too.