FOEN's 2024 Report Highlights Switzerland's Fiscal Challenge

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FOEN’s 2024 Report Highlights Switzerland’s Fiscal Challenge

Posted by: Baris Karapinar
Category: ESG News

Switzerland’s “2024 fiscal sustainability report” reveals growing financial pressures until 2060 due to ageing and climate protection efforts. The report highlights the Confederation facing deficits up to CHF 4 billion soon. Planning for long-term financial challenges becomes crucial in these times.

Demographic changes are set to increase spending from 17.2% to 19.8% of GDP by 2060. Without reforms, public debt could jump from 27% to 48% of GDP. The need for reforms is evident, especially at federal and cantonal levels. The Confederation faces challenges from AHV expenditures, while cantons feel the strain in healthcare costs.

For the first time, the report estimates the long-term financial impact of climate protection measures aimed at net-zero emissions by 2050. Climate protection efforts may slow economic growth, affecting public revenues. Electrifying transport could reduce revenue from oil taxes and road charges. However, these losses might be offset by new levies. By 2060, public debt could be 8% to 11% higher due to climate policies.

These projections provide a basis for future planning, emphasizing the importance of fiscal policy action. The report uses various scenarios to account for uncertainties in demographic and economic changes. It also introduces a pilot study to estimate climate protection costs, positioning Switzerland as a pioneer in this global effort.

Link to the news source

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