Canton of Basel-City

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations The implementation of the OECD minimum tax rate and the expected associated tax revenue windfall from 2025 demonstrates the dynamism of the canton?s economy. Tax reforms, continued lack of Swiss National Bank dividends, and increasing operating costs will soften budgetary performance. Repeated strong fiscal results drive an increasing amount of net transfers into the fiscal equalization mechanism. Strong results in previous years allow ambitious capital investment plans to be partially financed without resorting to excessive external financing. Historically high investment plans include future-oriented projects related to green infrastructure, affordable housing, and regional development. Debt levels are expected to remain stable through the forecast period after

...The improvement in the Canton of Basel-City's resource strength is driven by the dynamism and strength of its economy. The pharmaceutical and life sciences cluster in Basel-City continues to attract companies and people to the canton, underpinning growth and strong performance from recent years. The tax shortfall from recent personal income tax cuts is partly offset by strong performance of corporate and federal tax revenue. The tax revenue base is proving to be extremely resilient, even after-tax cuts and despite a tougher macroeconomic environment....

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