The outlook for the Swiss economy has deteriorated slightly compared to forecasts made this fall, calculate economists from the Center for Economic Studies (KOF) and the State Secretariat for the Economy (Seco).
Experts explain this sluggishness by the uncertain evolution of the international context, particularly in Germany and France.
Real gross domestic product (GDP), adjusted for sporting events, is expected to increase by 0.9% in 2024, compared to 1.1% previously, indicates a KOF press release published on Tuesday.
For 2025, the expected increase is 1.4%, instead of 1.6%, and 1.7% in 2026, as announced this fall.
The experts du Seco are counting on an acceleration of 1.5% in 2025, compared to 1.6% advanced in September.
“The recovery of the European economy is long overdue and the normalization of the international situation should not occur before 2026,” warns a press release.
Swiss exports are suffering from the slowdown in international demand and the strength of the franc, underline the authors. “This weakness is expected to persist until the middle of next year, when the economic situation is expected to improve slightly.” At the same time, the internal market is showing stability.
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In detail, the pharmaceutical sector remains the engine of Swiss growth, while investments in equipment are declining, specify KOF experts. “Investment in construction increased by 2.2% this year and will continue to increase in 2025 and 2026.” On the other hand, those most affected by the weak economy are services linked to industry and the manufacturing industry.
Falling inflation
The unemployment rate is expected to rise and should reach almost 3% by 2026, warn KOF analysts, citing branches with an international orientation such as hotels and restaurants and industry which weigh most heavily. Opinion shared by Seco experts, counting on 2.7% for the same year.
Concerning wages, they should increase by 1.8% in nominal terms or by 1.3% after deduction of the increase estimated at 0.5%, adds the KOF.
Finally for inflation“down more than expected in recent months”, it has been below 1% since September due in particular to lower oil prices, recalls the KOF by lowering its inflation forecasts for 2025 and 2026 to respectively 0.5% and 0.6%. Seco forecasters opt for a decline of 0.3 after 0.7%.
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Ambient uncertainty, such as geopolitical conflicts or threats of customs duties from the Trump administration, could “weaken global trade and cause ruptures in supply chains”, adds the KOF. However, “the sectoral structure of the Swiss economy and the diversity of its commercial partners contribute to stability”, says Seco.
The KOF forecasts a further cut of 25 basis points (bp) in the key rate of the Swiss National Bank (SNB) next March, after the 50 bp reduction made in mid-December.
ats/fgn
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