Swiss 2020 Financial Statements: record-breaking deficit

The Swiss Federal Budget ended 2020 with a record-breaking deficit of CHF 15.8 billion, caused by the COVID-19 pandemic. On the one hand, federal receipts were lower as a result of the economic downturn; on the other hand, the Confederation incurred high extraordinary expenditure to cushion the economic impact of the pandemic. The Federal Council was informed about the provisional results during its meeting on February 17, 2021. At the same time, it determined the fiscal policy framework for the next budget process. The Confederation is reckoning on a slow recovery for 2023 to 2025.

The federal budget ended 2020 with a deficit of CHF 15.8 billion, whereas a surplus of CHF 344 million had been expected in the budget. The deterioration of CHF 16.1 billion was due to the  impact  of  the  COVID-19  pandemic.  First,  the  economic downturncaused  by  the containment   measures   resulted   in   lower   receipts   (-3.7 billion,   or -5.0 %);   second,   the Confederation incurred high extraordinary expenditure to cushion the economic impact of the pandemic (14.7 billion).

Compared with the previous year, ordinary receipts fell by 3.4 %, which was roughly in line with the  expected  decline  in  nominal  GDP  (-3.9 %).  The  drop  in  receipts  (-2.6 billion)  was  primarily attributable to withholding tax (-3.1 billion). Companies were more reluctant to pay dividends and buy back shares in 2020, which meant that investment income receipts were significantly lower than a year earlier. However, value added tax (-0.4 billion) and mineral oil tax (-0.3 billon) were also down year on year. In contrast, direct federal tax was up (+0.9 billion), as it was largely related to income and profits in 2019. Actual  pandemic-related  expenditure  amounted  to  CHF  15 billion  in  2020.  The  largest expenditure items concerned short-time working compensation (10.8 billion) and COVID-19 loss ofearnings compensation (2.2 billion). The expenditure for the hardship support programme will not be reflected until the 2021 financial statements. Around CHF 31 billion was approved for COVID-19 measures in 2020. The big difference between this figure and actual expenditure was  essentially  due  to  short-time  working  compensation  and  COVID-19  loss  of  earnings compensation. These funds were calculated in spring 2020 on the basis of the effects of the pandemic, which could only be roughly estimated at that time. Overall, however, the economic downturn was less severe than anticipated in 2020. An overview of the 2020 expenditure for COVID-19 measures can be found in the appendix to this press release.

According to current estimates, a financing deficit of approximately CHF 20 billion is expected for  2021,  caused  by  the  extraordinary  expenditure  of  around  CHF  17  billion to combat the effects of  the COVID-19 pandemic  (budget  and  addendum  Ia).  In  2022  to  2024,  the Confederation expects the federal budget to break evenorbe slightly positive.

Increase in debt and shortfall on amortisation accountNet  debt  rose  by  CHF  15.5  billion in  2020,  reflecting  the financing  deficit.  To  meet the  high funding requirements for the COVID-19 measures, the Confederation increased its debt during 2020 and reduced its liquidity and non-administrative assets. Liquidity had risen sharply  in previous years as a result of various factors, especially in connection with withholding tax. By using  this  liquidity, the Confederation was able to avoid incurring  as  much  new  debt. Consequently, gross debt increased by “only” CHF 6.7 billion in 2020 and amounted to CHF 103.7 billion at the end of 2020.

The  amortisation  account  provides  the  debt  brake  statistics  for  the  extraordinary  budget. According to the current Financial Budget Act, a shortfall must be made up within six years, although  Parliament  may  extend  the  deadline.  A shortfall can be offset with the help of extraordinary receipts or structural surpluses in the budgets. As these options are not sufficient in view of the large shortfall of up to CHF 27 billioncurrently foreseeable for the end of 2021, it is necessary for the law to be revised. The consultation procedure should begin in summer 2021. Depending on how the pandemic evolves, this shortfall could increase even further.

The following can be found as an enclosure to this press release at

  • Overview of the main developments in terms of receipts and expenditure for fiscal 2020
  • Tables for the 2022-2024 financial plan
  • 2020 expenditure for COVID-19 measures
  • Charts for the 2020 financial statements

The detailed state financial statements are published in March each year.