Federal debt

Switzerland's level of debt is low by international standards. But how high is the Confederation's debt level and what is its composition?

Brief summary

Net federal debt stood at CHF 142 billion at the end of 2023, which corresponds to a debt ratio of 17.8% of GDP.

Switzerland's level of debt is low by international standards. The Confederation has the debt brake to thank for this. It has allowed for a considerable reduction in federal debt. However, debt rose sharply again between 2020 and 2022 as a result of the COVID-19 pandemic. The Confederation made CHF 30 billion available to cushion the economic impact.

The coronavirus-related debt is reflected in the shortfall in the amortisation account. This shortfall, which resulted from extraordinary expenditure less extraordinary receipts, amounted to CHF 27.2 billion at the end of 2023 and must be eliminated in accordance with the Financial Budget Act (FBA). Parliament chose to adhere to this complete elimination, but extended the timeframe for doing so. This debt is to be reduced again by 2035 (with the possibility of an extension to 2039), using future financing surpluses in the ordinary budget and extraordinary receipts arising from the profit distribution by the Swiss National Bank.

Net debt and debt ratio trends between 1990 and 2023
Net debt and debt ratio trends between 1990 and 2023

What is the composition of federal debt?

Around CHF 86 billion of the debt is money and capital market debt. The Confederation's net debt also includes other liabilities, such as outstanding payments vis-à-vis taxpayers, cantons or federal enterprises. Net debt consists of total liabilities less non-administrative assets.

How does the Confederation take on debt?

In order to raise borrowed capital, the Confederation issues debt instruments, so-called Confederation bonds and money market debt register claims. These debt instruments are securities and, like other securities, can be freely traded by the holders during the term.

  • Money market debt register claims are short-term borrowings, i.e. loans, mostly with a term of three months and a maximum of 12 months.

  • Confederation bonds guarantee more long-term borrowing and have maturities of up to 50 years.

The Confederation pays a price for its debt, i.e. debt interest. This totalled CHF 1.25 billion in 2023.

From whom does the federal government borrow?

As the money market and capital market instruments issued are traded and the name of the holder is not registered, the federal government does not know exactly who holds them. However, the statistics of the Swiss National Bank give an indication of the likely composition of the Confederation bond investor base: domestic investment funds and insurance companies account for a large proportion, foreign investors represent around 19%, and the remainder is shared by pension funds, banks and other domestic investors. Consequently, most of the federal debt is owed to domestic institutional investors.

Investorenbasis der «Eidgenossen»
Investorenbasis der «Eidgenossen»

Last modification 25.04.2024

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