ZURICH: The Swiss government expects its budget to run a slight deficit in 2014 after parliament suspended planned savings measures, but sees a renewed balance over the next few years provided the global economy picks up.
The Finance Ministry said in a statement on Wednesday it expects a 40 million Swiss franc ($42.6 million) financing gap after parliament rejected a package of saving measures.
The government had originally forecast a small surplus for 2014 in February. The deficit compares with gross domestic product forecast at 615 billion francs, making the gap worth less than 0.01 per cent of economic output - tiny compared with the 3 per cent of GDP ceiling that many European Union countries are struggling to achieve.
Public spending in Switzerland is kept in check by a "debt brake", enacted in 2003, which forces the government to link spending with revenues and build up surpluses when economic growth is sound.
The Swiss economy beat even the most optimistic forecasts to grow by 0.6 per cent in the first quarter, when consumers, construction and trade helped the country outperform euro zone neighbours.
The ministry said it expected the budget to be balanced over the 2015-2017 period, but saw a risk of structural deficits of up to 300 million francs from 2015 if it cannot fully implement its savings package.
The budget could also come under pressure if parliament grants additional money for the armed forces.
Reform to Switzerland's corporate tax laws could also influence future budgets as well as the timing of an economic recovery in Europe, the government said. Last week, the Swiss National Bank kept its growth forecast for the year at 1-1.5 per cent, saying it expected the economy to weaken in the second quarter.
indiatimes.com
The Finance Ministry said in a statement on Wednesday it expects a 40 million Swiss franc ($42.6 million) financing gap after parliament rejected a package of saving measures.
The government had originally forecast a small surplus for 2014 in February. The deficit compares with gross domestic product forecast at 615 billion francs, making the gap worth less than 0.01 per cent of economic output - tiny compared with the 3 per cent of GDP ceiling that many European Union countries are struggling to achieve.
Public spending in Switzerland is kept in check by a "debt brake", enacted in 2003, which forces the government to link spending with revenues and build up surpluses when economic growth is sound.
The Swiss economy beat even the most optimistic forecasts to grow by 0.6 per cent in the first quarter, when consumers, construction and trade helped the country outperform euro zone neighbours.
The ministry said it expected the budget to be balanced over the 2015-2017 period, but saw a risk of structural deficits of up to 300 million francs from 2015 if it cannot fully implement its savings package.
The budget could also come under pressure if parliament grants additional money for the armed forces.
Reform to Switzerland's corporate tax laws could also influence future budgets as well as the timing of an economic recovery in Europe, the government said. Last week, the Swiss National Bank kept its growth forecast for the year at 1-1.5 per cent, saying it expected the economy to weaken in the second quarter.
indiatimes.com
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