Basel-City (Canton of)

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations The Canton of Basel-City (Basel-City)'s very wealthy economy and sound budgetary performance contribute to its position as one of only a few contributors to the Swiss fiscal equalization system. The canton's prudent financial management aims to keep debt at moderate levels. --Basel-City will presumably achieve a surplus after capital accounts again in 2021, but slightly weaker results in the years to come. --Swiss real GDP is forecast to increase more than 3% in 2021 and 2022, benefiting from restored international trade. --The diversified and very wealthy economy will digest the economic and social turmoil of the pandemic. --Basel-City has created sufficient budgetary headroom to digest

...The ratings reflect the canton's very strong economic fundamentals with very high wealth levels and low unemployment rates. Extraordinary high tax revenue from 2019 to 2021, partly as one-offs, helped the canton to offset the financial effects of the COVID-19 pandemic and moderately reduce its debt burden. The ratings also benefit from the canton's high flexibility to alter its tax rates if unforeseen developments occur. However, they take into account the canton's potentially sizable contingent liabilities from its stake in a commercial bank...

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