Switzerland’s Federal Assembly approved a budget for 2026 on 19 December 2025, ensuring public finances stay in surplus and have a small buffer of SFr84.6m ($99.6m). This budget reflects a strong political emphasis on security, with both chambers endorsing the package— the lower house passing it by a vote of 127 to 67 despite the Swiss People’s Party rejecting it due to concerns over the economic outlook, and the upper house giving unanimous support. Total federal spending under the budget will reach SFr91.1bn ($107.2bn) against projected revenues of SFr90.3bn ($106.3bn), a more favourable outcome than anticipated, largely due to an additional SFr290m ($341.4m) in revenue contributions from the canton of Geneva.
Defence stands out as the primary beneficiary of the allocations, receiving significant boosts, including an extra SFr70m ($82.4m), bringing the total spending to SFr2.7bn ($3.2bn), alongside SFr10m ($11.8m) for cybersecurity enhancements and SFr2m ($2.4m) for the federal police. Agriculture also secured SFr10m ($11.8m) in direct support for winegrowers and another SFr10m ($11.8m) to fund vaccinations against bluetongue disease. Centrist parties acted as key brokers throughout the three-week debate, forging compromises that garnered majorities, such as the SFr1.5m ($1.8m) released to sustain Tox Info Suisse, the poison-control center whose future was previously uncertain, and an additional SFr1m ($1.2m) for efforts to combat violence against women, elevating the federal equality office’s budget to just over SFr18m, which is SFr2.5m ($21.2m-$2.9m) more than the government’s initial proposal amid public pressure.
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The budget also includes funding cuts, most notably the rejection of SFr10m ($11.8m) needed to launch the proposed Basel–Malmö rail link service scheduled for April 2026, marking a clear defeat. International cooperation funding was trimmed to just over SFr800m ($941.7m), SFr16m ($18.8m) less than originally budgeted, while support for non-governmental organisations based in Geneva dropped by SFr5m ($5.9m) to a total of SFr300m ($353.1m), though these reductions proved smaller than initially planned. Despite ideological divides, the swift compromises underscore parliament’s commitment to fiscal discipline in a challenging economic context. In 2026, the budget cuts will be allocated to the departments, the Federal Chancellery, the authorities, and the courts in proportion to their respective responsibilities in the relevant area. The Federal Council has tasked the Federal Chancellery with developing an implementation plan for the years 2027–2029 by May 2026, in collaboration with the Federal Department of Finance (FDF) and in consultation with the other departments.
In mid-December 2025, the Swiss Council of States (Ständerat) approved a revised version of the 2027–2029 relief package, reducing the federal government’s original savings target from SFr8.5bn ($10bn) to SFr5.6bn ($6.6bn), a cut of nearly SFr3bn ($3.5bn) or over one-third of the initial proposal. Specifically, the Council decided to cut funding for road construction and maintenance by SFr88.8m ($104.5m), continue the cantonal building program with a savings effect of SFr613.2m ($721.8m), which is SFr548m ($645m) less than the federal proposal, and reduce capital contributions to the Railway Infrastructure Fund (BIF) by SFr200m ($235.4m), which is SFr400m ($470.8m) less than originally planned. As a result, planned infrastructure and public building savings have been significantly scaled back.
The Federal Chambers of Switzerland have approved a new funding framework to bolster International Geneva, underscoring the country’s commitment to maintaining Geneva’s status as a leading global hub for diplomacy and international cooperation. Facing budgetary pressures and competition from other cities, Swiss lawmakers backed a credit of SFr122.6m for 2026–2029 to support the reception, infrastructure, partnerships, and governance of international organisations based in Geneva, which are currently under financial strain. While some political parties called for deeper budget cuts, the Senate ultimately endorsed the government’s proposal with a strong majority. This move reflects Switzerland’s strategic effort to strengthen its role as a dependable host state for NGOs, multilateral organisations, and humanitarian actors in International Geneva.
Moreover, on 10 December 2025, the Swiss parliament elected Guy Parmelin, the economics minister from the Swiss People’s Party, as President of the Swiss Confederation for 2026, securing a record 203 votes out of 228 cast. This marks his second term in the rotating, largely ceremonial role, having previously served in 2021 while he continues leading the Federal
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Switzerland Construction Market Size, Trend Analysis by Sector, Competitive Landscape and Forecast to 2029 (H1 2025)
Department of Economic Affairs, Education and Research, a position he has held since 2019. Parmelin, a 66-year-old winemaker from French-speaking Vaud, succeeds Finance Minister Karin Keller-Sutter and will be supported by Foreign Minister Ignazio Cassis as vice president, with both assuming duties on 1 January 2026. Parmelin’s strategy focuses on strengthening Switzerland’s position as a competitive global business hub by promoting innovation, supporting entrepreneurship and research partnerships, and widening trade networks through free-trade agreements, including those with countries such as India, to ensure the economy remains open and resilient.
According to GlobalData, the Swiss construction industry is expected to register an annual growth of 1.4% in 2026, before registering an annual average growth of 1.6% from 2027 to 2029, supported by investments in energy, manufacturing, and residential building projects. Switzerland’s federal government announced an ambitious plan in September 2025 to address its worsening public finances, aiming to save SFr2.4bn ($2.8bn) in 2027, rising to SFr3bn ($3.5bn) in both 2028 and 2029, with a revised total of nearly SFr3.1bn ($3.6bn) in 2029. The government’s operating costs will be trimmed by SFr300m ($353.1m) by 2028, with SFr190m ($223.6m) of that from staff expenses and at least SFr100m ($117.7m) from changes to employment conditions. Despite budget tightening, structural deficits are expected to reappear at over SFr2bn ($2.4bn) in 2027 and widen to more than SFr4bn ($4.7bn) by 2029. The federal government’s debt stood at SFr141bn ($166bn) at the end of 2024, equivalent to 17% of GDP, up from SFr40bn ($47.1bn), 10% of GDP in 1990.
Overall, Switzerland’s budget outlook reflects a cautious balancing act between fiscal consolidation and safeguarding essential infrastructure investment. While the 2027–2029 relief package still targets meaningful savings, the Council of States’ decision to substantially reduce the original cuts signals a clear intention to avoid excessive pressure on the construction and infrastructure sectors. By scaling back reductions to road construction, public buildings, and rail infrastructure funding, Switzerland aims to preserve long-term economic competitiveness and infrastructure quality, while remaining aligned with fiscal discipline under the debt-brake framework.
