SDG 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
Goal description and MONET principle
«[…] To […] build more peaceful and inclusive societies, there needs to be more efficient and transparent regulations put in place and comprehensive, realistic government budgets. The current use of public finances must not jeopardise the capacity to meet the individual and social needs of future generations (principle 10d).»
Significance of the indicator
The indicator shows the share of gross public debt (public administration sector) in relation to gross domestic product (GDP). It describes the debt burden in relation to economic potential.
High public sector debt is a burden on current and future generations as its reimbursement and the payment of interest blocks financial resources that can be substantial. Public sector debt is tolerated from a sustainable development point of view, as long as it does not compromise the execution of the State’s central tasks or the possibility for future generations to cover their needs. To move towards sustainable development, therefore, debt should not exceed a certain threshold or a reduction in the debt ratio should be sought.
Help for interpretation
Debt constraints, introduced in 2003 at federal level, as well as similar regulation introduced in a number of cantons, have helped to steadily decrease the public sector debt ratio since 2003.
International comparability
The debt ratio is obtained on the basis of the Maastricht criteria. It is, therefore, comparable with those observed in EU countries.
Tables
Methodology
The indicator shows the share of public authority gross consolidated debt (Confederation, cantons, communes and public social insurances) in gross domestic product (GDP) as a %. Gross domestic product (GDP) is calculated annually by the Federal Statistical Office for the national accounts. Values prior to 1995 were calculated by the State Secretariat for Economic Affairs (SECO).
The Confederation and a number of cantons have a mechanism that prevents expenditure, over an entire economic cycle, from exceeding revenue (debt constraint). Stabilisation of debt in absolute terms is sought, enabling the debt ratio to be lowered as the economy grows.
As the ideal debt ratio cannot be defined scientifically, tolerance thresholds may be established at political level. The Maastricht criteria form a binding threshold set by the EU and are valid for all public authorities in a country. The criteria demand that a State’s debt does not exceed 60% of nominal gross domestic product.
The statistics on public finances, known as the financial statistics, provide an overview of the revenue, finances and assets of the public administration sector in Switzerland. They are compiled each year for the public authorities (Confederation, cantons, commune and public social insurances) by the Federal Finance Administration. The statistics are detailed and aggregated for the public administration sector as a whole. The financial statistics are based on the federal financial statements as well as on financial statements from all of the cantons and on the annual accounts of more than 900 communes. This group of communes includes the cantons’ towns and administrative centres as well as communes randomly selected for each canton. Data relating to the remaining communes are based on estimates and extrapolations. Furthermore, the public social insurances (OASI, DI, LEC, SI, family allowances in agriculture and maternity insurance in the canton of Geneva) are also taken into account. The financial statistics adhere to the principle of non-compensation, i.e. expenditure and revenue are shown separately.
Principles
10d Long-term focus of public finances
The current use of public finances must not be allowed to jeopardise the capacity to meet the individual and social needs of future generations.
Contact
Federal Statistical Office Section Environment, Sustainable Development, TerritoryEspace de l'Europe 10
CH-2010 Neuchâtel
Switzerland
- Tel.
- +41 58 460 58 46
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09.00 - 12.00 / 14.00 - 16.00