Quantcast
Wednesday , September 20 2017
Breaking News
Home / International Customs / Central bank payout keeps Swiss budget in surplus
Central bank payout keeps Swiss budget in surplus

Central bank payout keeps Swiss budget in surplus

ZURICH: Big profits from the Swiss National Bank’s massive foreign currency investments should help keep the country’s public finances in the black during 2017, Switzerland’s government said on Thursday. Interest and dividend payments from investments bought by the SNB during its campaign to weaken the highly-valued Swiss franc allowed it to hand over some 577 million Swiss francs ($605.52 million) to federal government this year. The country’s 26 cantons, or states, have received just over 1.1 billion francs. But higher spending in areas like welfare and rail infrastructure mean the federal government is likely to end 2017 “only with a small surplus” of 530 million francs, less than last year’s 1.87 billion francs, the finance department said. Spending limits proposed by the government should result in a surplus of almost 1.4 billion francs in 2018, it said. Highlighting the importance of the SNB’s contribution, the federal government’s ordinary fiscal balance — which excludes exceptional payments — is forecast to decline to 341 million francs in 2017, down from 1.4 billion in 2016. The cantons meanwhile are expected to post a 2017 surplus of 719 million francs, up from 267 million francs a year earlier and helped by their pay-out from the central bank.

The Swiss National Bank’s foreign exchange reserves rose in August, data showed on Thursday, and are now 10 percent bigger than Switzerland’s entire economic output. The SNB held 716.667 billion Swiss francs ($749.730 billion) in foreign currency at the end of August, compared with 714.861 billion francs in July, preliminary data calculated according to the standards of the International Monetary Fund showed. The SNB has invested foreign currency it has bought to weaken the Swiss franc into bonds and shares, and is a large shareholder in U.S. heavyweights like Google and Apple.