(Adds details, background)
ZURICH, June 30 (Reuters) - Switzerland’s coronavirus relief debt is likely to be about 25 billion Swiss francs ($27.14 billion), at the low end of the government’s previous estimate, Swiss Finance Minister Ueli Maurer told the Neue Zuercher Zeitung newspaper.
“Because we need less money now than was foreseen in the budget, the debt is likely to be closer to 25 billion francs than 30 billion,” Maurer said in the interview.
Maurer proposed repaying the debt over the next dozen years, including by earmarking the Swiss National Bank’s increased profit distributions to the federal and cantonal governments, to direct about 1.3 billion francs annually to cut federal debt.
That would help cushion the impact of the pandemic without resorting to tax hikes or painful cost-cutting, Maurer said in the interview.
“That would mean that we would have to sweat out a total of 2 billion francs per year over the next 12 years or so,” he said. “That would be feasible.”
Maurer said he “could imagine that we would reduce the debt completely,” but wanted to wait until the end of 2021 for definitive pandemic-related debt estimates before settling on the path on how to bring that down.
Maurer said the pandemic would in all cost Switzerland’s economy around 60 to 70 billion francs, including hard-to-quantify losses such as long-term consequences and lost educational opportunities. Still, it could have been worse, he said.
“The federal government has allocated a total of 39 billion Swiss francs (for pandemic relief),” he said. “We probably won’t need all of that.”
With the country’s vaccination programme on track, coronavirus infections on the wane and similar recoveries under way elsewhere in the West, the Swiss National Bank is now expecting gross domestic product to grow 3.5% this year, faster than previous forecasts. (Reporting by John Miller; Editing by Michael Shields)