Executive Summary

The Federal Finance Administration (EFV) forecasts a significant deterioration in public finances in 2026 and 2027, before the situation stabilizes again from 2028 onwards. The main drivers are the introduction of the 13th AHV pension without additional financing and a slightly deficient result from unemployment insurance. SNB profit distributions and planned VAT increases are expected to offset deficits from 2028 onwards. An alternative scenario reveals substantial risks should these financing sources fail to materialize.

Persons

  • Federal Finance Administration (EFV)

Topics

  • Public Finances
  • AHV Pension (13th Pension)
  • SNB Profit Distribution
  • Value Added Tax
  • Unemployment Insurance

Clarus Lead

Switzerland's public budgets (federal government, cantons, municipalities, social insurance schemes) will come under pressure in 2026–2027. Two central factors are exacerbating the situation: the introduction of the 13th AHV pension without counter-financing and deficits in unemployment insurance. Critical to financial stability are SNB profit distributions (CHF 4 billion in 2026, CHF 3 billion in 2027–2029) and the planned VAT increase of 0.8 percentage points from 2028 onwards to finance security, defense, and AHV. Without these measures, a significant deficit of -3.8 billion francs through 2029 threatens.

Detailed Summary

The financing result of the public sector will remain under pressure in 2026 and 2027. The 13th AHV pension places considerable strain on social insurance schemes, as it is currently expected to be introduced without additional financing sources. In parallel, unemployment insurance is likely to run a slight deficit due to the labor market situation—a deficit that can, however, be covered by the insurance's net assets. The SNB profit distribution of 4 billion francs in 2026 and 3 billion francs in 2027 acts as an important buffer to limit deficits.

From 2028 onwards, a recovery is taking shape. The planned VAT increase of 0.8 percentage points to strengthen security, defense, and AHV financing, combined with an expected improvement in the labor market situation, should stabilize the financial position. Moderate economic recovery will additionally support growth in tax revenues.

The alternative scenario reveals substantial risks: should the SNB cease profit distributions from 2027 onwards and the VAT increase fail to materialize in 2028, the financing result would deteriorate dramatically, falling to -3.8 billion francs in 2029. This scenario does not account for current geopolitical developments or changes in international trade policy, but serves an illustrative purpose, as statutory fiscal rules limit room for maneuver.

Key Messages

  • 2026–2027: Significant deterioration in public finances due to 13th AHV pension and unemployment insurance deficits
  • SNB Distributions: CHF 4 billion (2026) and CHF 3 billion (2027–2029) are central to combating deficits
  • From 2028: Recovery through VAT increase (0.8 percentage points), improved labor market conditions, and economic growth
  • Alternative Scenario: Without SNB profits and VAT increase, a deficit of -3.8 billion CHF in 2029 threatens
  • Uncertainties: Geopolitical developments, international trade policy, and carryover balances significantly influence forecasts

Critical Questions

  1. Evidence/Data Quality: Are SNB profit distribution forecasts (3–4 billion CHF) based on current balance sheets or political assumptions? How robust is the data basis given volatile financial markets?

  2. Conflicts of Interest: To what extent does dependence on SNB profits influence political willingness to implement structural reforms (e.g., AHV financing)?

  3. Causality/Alternatives: Could the 13th AHV pension alternatively be financed through contribution rate increases or capital funding rather than relying on SNB distributions?

  4. Feasibility/Risks: What political hurdles exist for the VAT increase of 0.8 percentage points, and how likely is implementation by 2028?

  5. Geopolitical Risks: The alternative scenario ignores recent Middle East events—how could escalated conflicts or trade wars destabilize the forecast?

  6. Labor Market Assumptions: On which economic growth scenarios are the expected improvements in labor market conditions for 2028–2029 based?

Sources

Primary Source: Financial Statistics: Forecasts for Public Finances 2026–2029 – https://www.news.admin.ch/de/newnsb/ZaLdYqBDyq3Yld8DkHddz

Verification Status: ✓ March 19, 2026

This text was created with the support of an AI model. Editorial Responsibility: clarus.news | Fact-Check: March 19, 2026