GENEVA -Switzerland's President and Finance Minister Karin Keller-Sutter forecast higher annual budget deficits of around 3 billion Swiss Francs ($3.31 billion) in the next few years due to higher military spending and pension costs, she told Swiss newspapers in an interview.
Switzerland has historically had balanced budgets although began reporting larger deficits from 2020 due to extra costs tied to the COVID-19 pandemic. In 2024, the projected deficit was 2.6 billion Swiss Francs, a government website showed.
"In total, there is around 2 billion Francs that were not budgeted for in the 2026 budget," said Keller-Sutter in an interview published in SonntagsZeitung and Tages-Anzeiger on Sunday.
"We do have additional income from profit taxes, but they can't compensate for everything," she said, referring to high profits reported in 2022 and 2023 by Geneva-based commodity trading houses.
Swiss voters decided in a referendum last year to increase pension payments for older people despite government warnings that it is financially unsound.
The neutral country is also upgrading its defences after the Ukraine war, buying new fighter aircraft and missile systems as well as building new data centres to make it less vulnerable to cyber attacks.
Keller-Sutter, who took on the rotating one-year presidency earlier this month, said in the same interview that the government was working on consultation procedure documents for new banking regulations after the release last month of an inquiry into the collapse of Credit Suisse.
She said such regulations might include new powers for regulators to wield fines for banks as well as individuals plus possible claw-backs for banker bonuses.
Asked whether new measures would prevent future government bail-outs, she indicated there was no guarantee. "We in Switzerland...have to do our homework (on banking regulation). But one shouldn't claim 100% security," she said.
($1 = 0.9057 Swiss francs)