The Swiss economy is expected to experience notably below-average growth this year, mainly due to low capacity utilization in industrial production and elevated financing costs, which are anticipated to suppress investments, according to the State Secretariat for Economic Affairs (SECO) on Monday. Even though the economic growth forecast for 2024 has been modestly revised to 1.2 percent from an initial 1.1 percent, this rate still indicates a considerably below-average performance for the Swiss economy, SECO's expert group noted.
Exports are projected to offer some support to economic growth. In addition, rising employment rates and relatively stable inflation are expected to bolster private consumption, SECO reported.
As the global economy gradually recovers, growth in Switzerland is forecasted to normalize to 1.7 percent in 2025, the agency added. The unemployment rate is anticipated to increase to 2.4 percent in 2024 and further to 2.6 percent in 2025, with both figures revised upwards by one percentage point.
Moreover, inflation is projected to ease to 1.4 percent in 2024, slightly below the previous estimate of 1.5 percent. The inflation forecast for the following year remains at 1.1 percent.
The think tank highlighted ongoing geopolitical risks, particularly citing armed conflicts in the Middle East and Ukraine. Additionally, economic developments in Germany and China pose potential risks to the global economy and Swiss foreign trade, as observed by the expert group.
