Corona Crisis and Public Finances
The Swiss economy plunged into the most severe recession in decades due to the coronavirus pandemic. To support the economy, Switzerland introduced various extraordinary measures. These measures cause high deficits and an increase in nominal federal debt. Since the beginning of the pandemic, the public has debated the appropriate size of the fiscal measures and how the Swiss government should deal with the resulting deficit. To make the views of research economists in academia on this topic visible to the public, the KOF, together with the external page Neue Zürcher Zeitung (NZZ), conducted in April 2021 a survey.
KOF contacted 841 economists for the survey. We received responses from 167 economists from 16 institutions.
Results
Question 1: Support measures
During the pandemic, the Swiss state introduced various measures to support the economy. For example, it has provided guarantees for bridging credits, expanded support for short-time work, introduced a compensation scheme for the self-employed and provided financial support for particularly hard-hit companies. In your opinion, the total amount of support provided by the state during the pandemic has so far been
Question 2: Fiscal programme
Some countries have initiated fiscal programmes to stimulate the economy this year. A proposal for Switzerland to launch a fiscal programme is, in your opinion,
Question 3: Debt brake
The support measures cause high deficits and an increase in nominal federal debt. According to the Swiss debt brake, the deficit on the so-called amortisation account should be paid off within six years through structural surpluses in the ordinary budget. In special cases, the Federal Assembly can extend the deadline for debt reduction. From an economic point of view, how should the central government best deal with the increase in debt caused by the crisis?
Question 4: Debt reduction
For a swift reduction of the Confederation's nominal debt, expenditures would have to be reduced or revenues would have to be increased. Which measure would be most suitable from an economic point of view?
Question 5: Debt ratio
In 2019, and thus before the Corona crisis, Switzerland had a public debt ratio (according to the Maastricht definition) of around 26 percent of GDP. As a result of the exceptional measures introduced during the pandemic, the ratio rose to over 30 percent. What public debt ratio should a country as Switzerland aim for in the medium to long term?
Question 6: Profit disbursement SNB
The Swiss National Bank (SNB) wants to distribute up to CHF 6 billion annually to the Confederation and the cantons. Should the Confederation earmark its part of the profit disbursement for debt reduction? In your view, such earmarking is
About this survey
KOF is acting as a mediator between academic researchers and the public. It aims to make the voices of research economists heard. KOF categorises economic researchers as those from Swiss research institutions who have published scientifically.
The survey was conducted together with the external page Neue Zürcher Zeitung.
The press release can be found Download here (PDF, 121 KB). The NZZ article (in German) can be found external page here.
Contact
KOF Konjunkturforschungsstelle
Leonhardstrasse 21
8092
Zürich
Switzerland
KOF FB Konjunkturumfragen
Leonhardstrasse 21
8092
Zürich
Switzerland