In Switzerland, this will be especially visible in pharma. Inflation should be at 1.1% and GDP growth around 1.9%, respectively 2.0% in Geneva.
At the dawn of 2025, central banks seem to have won their fight against inflation and are continuing their cycle of rate cuts. Whether it is the technology sector in the United States, business services in Europe or pharmaceuticals in Switzerland, growth in any region is driven by a limited number of sectors generating potentially problematic concentration. In 2025, inflation in Switzerland should be at 1.1% and GDP growth around 1.9%, respectively 2.0% in Geneva.
In the United States, inflation under control… for now?
The uncertainties linked to the elections have been lifted in the United States and the Republican camp led by Donald Trump now concentrates all powers with the presidency and control of both the Senate and the House of Representatives. This very clear victory pushed the markets to new heights, both for the S&P500 and the Nasdaq, and supported the dollar. Two sectors in particular stand out: discretionary consumption which could be stimulated by tax cuts and the financial sector with probable deregulation of banks. Energy prices, particularly oil, are falling in anticipation of increased production, which helps to keep inflation under control. But if Washington can pride itself on being self-sufficient in energy terms, it is not the same with regard to the metals necessary for the technological transition which are still mainly transformed in China. Furthermore, inflation presents a certain rigidity (wages, prices of services and housing costs remain high), calling into question the Fed’s decision to soon lower its key rates.
Europe in the grip of uncertainty
In Europe, it is business services that support growth, taking over from manufacturing production in great difficulty, like the German automobile sector. However, the Old Continent is counting on a wider diversification of its activities. Mario Draghi, the savior of the euro at the time, proposed ideas in his Budapest declaration and recommended in particular achieving energy independence to reduce the competitiveness gap. However, the political crises in France and Germany limit the scope of his message.
In Switzerland: a very strong concentration on pharma
In Switzerland, growth is supported by the pharmaceutical sector, whose exports, mainly intended for the United States, represent some 30% of trade. Here again, the movement of concentration may hide a vulnerability, especially since Donald Trump chose the controversial Robert F. Kennedy as Minister of Health. Inflation seems to have stabilized below 1% and the SNB has lowered its key rate to 0.5%. The central bank thus suggests that it wants to avoid the risks of deflation, and a return to negative rates, which the strength of the franc fuels.
