Forecast for public finances

18.03.2025

The public sector's financial development differs depending on the level of government. The latest forecasts of the Federal Finance Administration (FFA) through to 2028 show that the Confederation's financial situation will depend heavily on the relief package in particular. The cantons are likely to continue to generate surpluses, while the municipalities are set to return to small structural deficits from 2026 onward. Due to the unresolved funding for the 13th monthly AHV pension payment, there is still considerable uncertainty for the social security funds.

The FFA's Financial Statistics Section publishes forecasts for the government units (Confederation, cantons, municipalities and social security funds) twice a year. The current forecasts go up to 2028.

2024: general government surplus despite absence of SNB distribution

For 2024, the Confederation, cantons, municipalities and social security funds are expected to generate a financing surplus of CHF 7.0 billion, representing a year-on-year increase of CHF 3.2 billion in total. The main reasons for this include strong tax revenue growth at all levels of government and the social security funds' surplus of CHF 5.4 billion. This result was achieved despite the absence of a profit distribution by the SNB for the Confederation and the cantons. The result for federal finances in 2024 would have been around one billion worse if the capital contribution to SBB had not been postponed to the following year. A surplus of CHF 220 million is anticipated for the municipalities. The general government's net debt will probably decrease and amount to CHF 112.9 billion at the end of 2024.

2025 forecast: financing surplus supported by SNB distributions

Relative to 2024, the general government's surplus is likely to fall by around CHF 1 billion to CHF 5.9 billion in 2025, due primarily to significantly higher expenditure, despite robust growth in receipts. The social security funds' financing surplus is expected to decrease by CHF 1.6 billion to CHF 3.8 billion, not least because of slower economic growth and, as a result, a less buoyant labor market.

The Confederation is likely to achieve a neutral fiscal balance overall in 2025, while the cantons are expected to generate a surplus of CHF 2.4 billion. The Confederation and the cantons will benefit from SNB distributions of CHF 1 billion and CHF 2 billion, respectively. The Confederation is also expected to see an increase in direct federal tax receipts. A considerable portion of these additional receipts will result from exceptionally high profits for energy and commodity trading companies in the canton of Geneva, which will generate additional receipts of several hundred million through to 2028. The municipalities are expected to break even. The general government's net debt is likely to fall further to CHF 111.0 billion.

2026 forecast: affected by the 13th monthly AHV pension payment

A surplus of CHF 1.9 billion is anticipated for the general government in 2026. Net debt is set to stand at CHF 110.8 billion at the end of 2026. The forecast is based on the assumption that the SNB will once again distribute CHF 3 billion to the Confederation and the cantons. The Confederation is thus set to have a marginally negative fiscal balance of CHF 0.6 billion. Despite slightly slower tax revenue growth, a surplus of CHF 2 billion is anticipated for the cantons. The somewhat weaker momentum for tax revenue is also likely to affect the fiscal balance of the municipalities, which are expected to post a deficit of CHF 380 million.

A positive fiscal balance of CHF 930 million is anticipated for the social security funds. The deterioration of the balance compared to the previous year is mainly due to higher expenditures for the 13th AHV pension without offsetting financing. The additional expenditures for the 13th pension amount to 4.3 billion.

Forecast for 2027 to 2028: development dependent on relief package 27

Surpluses of CHF 3.3 billion (2027) and CHF 3.7 billion (2028) are anticipated for the general government. Net debt is likely to fall to CHF 107.7 billion by the end of 2028. Like in the case of 2026, the forecast is based on the assumption that the SNB will distribute CHF 3 billion annually to the Confederation and the cantons.

The positive fiscal balances of CHF 0.8 billion and CHF 1.3 billion will be achievable for the Confederation only if the planned relief measures of CHF 2.7 billion and CHF 3.6 billion are implemented in 2027 and 2028, respectively. As the relief measures have not yet been adopted, the Confederation's fiscal balance remains highly uncertain. Bolstered by a robust labor market environment, the social security funds are likely to generate surpluses of CHF 2.1 billion and CHF 2.4 billion. The forecast is based on the assumptions that the 13th monthly AHV pension payment will be financed by hiking VAT and that the federal share of AHV expenditure will be lowered from 20.2% to 19.5% in accordance with the Federal Council's proposal. These assumptions are subject to considerable uncertainty, as the proposal still has to be debated by Parliament, and a VAT increase is subject to a mandatory popular vote.

Despite lower receipts, the cantons are expected to post positive fiscal balances of CHF 0.9 billion and CHF 0.6 billion – factoring in the relief package 27 measures, which will also impact the cantons. In the case of the municipalities, the fiscal balance is likely to return to pre-COVID-19 pandemic levels by 2028. A deficit of around CHF 0.6 billion is anticipated.

General government fiscal balance (incl. alternative scenario) and by sub-sector: 2015 to 2028, FS Model

The chart depicts the fiscal balance for the general government and the individual sub-sectors. The alternative scenario shown in the chart assumes that there will be no SNB distributions from 2026 onward, that the relief package will not be introduced from 2027, and that VAT will not be hiked to finance the 13th monthly AHV pension payment from 2027 onward.

Forecast assumptions and uncertainties The forecasts are based on the current resolutions and proposals of the Confederation, cantons and municipalities regarding budgets, status assessments and financial plans, as well as the latest forecasts concerning economic growth and SNB profit distributions. In addition, empirical values for budget underruns are taken into account on the expenditure side. The forecasts depend on several factors subject to uncertainty, including relief package 27, SNB distributions, funding for the 13th monthly AHV pension payment and the level of budget underruns. Moreover, geopolitical developments and an increase in global tariffs could constitute further risk factors for public finances. However, the impulse from the infrastructure program in Germany and increased defence spending in the EU could have positive spillover effects on the Swiss economy and, consequently, on public finances. The chart shows an alternative scenario for the general government. It is assumed here that there will be no SNB distributions from 2026 onward, that the relief package will not be introduced from 2027, and that VAT will not be hiked to finance the 13th monthly AHV pension payment from 2027 onward. As a result, the general government's fiscal balance would deteriorate to CHF -3.8 billion relative to the baseline scenario (3.7 bn). The alternative scenario does not take into account the potential negative impacts of an increase in global tariffs, nor the potential positive impacts of additional fiscal impulses in Europe.

Forecast assumptions and uncertainties

The forecasts are based on the current resolutions and proposals of the Confederation, cantons and municipalities regarding budgets, status assessments and financial plans, as well as the latest forecasts concerning economic growth and SNB profit distributions. In addition, empirical values for budget underruns are taken into account on the expenditure side. The forecasts depend on several factors subject to uncertainty, including relief package 27, SNB distributions, funding for the 13th monthly AHV pension payment and the level of budget underruns. Moreover, geopolitical developments and an increase in global tariffs could constitute further risk factors for public finances. However, the impulse from the infrastructure program in Germany and increased defence spending in the EU could have positive spillover effects on the Swiss economy and, consequently, on public finances.

The chart shows an alternative scenario for the general government. It is assumed here that there will be no SNB distributions from 2026 onward, that the relief package will not be introduced from 2027, and that VAT will not be hiked to finance the 13th monthly AHV pension payment from 2027 onward. As a result, the general government's fiscal balance would deteriorate to CHF -3.8 billion relative to the baseline scenario (3.7 bn). The alternative scenario does not take into account the potential negative impacts of an increase in global tariffs, nor the potential positive impacts of additional fiscal impulses in Europe.

Detailed financial statistics data

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