Switzerland: Economic growth eases in the third quarter
November 26, 2021
Economic growth ebbed slightly in the third quarter, with GDP increasing 1.7% on a seasonally-adjusted quarter-on-quarter basis (Q2: +1.8% s.a. qoq). The economy is now above its pre-pandemic level, and thus is faring well relative to European peers. However, the Q3 slowdown would have been more pronounced if not for a large positive contribution from the “changes in inventories and statistical discrepancies” subsector.
Household spending growth waned to 2.7% seasonally-adjusted quarter-on-quarter in Q3 compared to a 4.0% expansion in Q2. Public consumption contracted 1.5% in Q3 (Q2: +4.1% s.a. qoq), likely due to reduced pandemic-related spending. Meanwhile, fixed investment was down 0.8% in Q3, contrasting the 2.1% expansion recorded in the prior quarter.
Exports of goods and services contracted 0.1% in Q3, marking the worst reading since Q2 2020 (Q2: +3.9% s.a. qoq). Conversely, imports of goods and services declined at a softer rate of 1.4% in Q3 (Q2: -1.7% s.a. qoq).
On an annual basis, economic growth lost momentum, cooling to 4.1% in Q3, down from the previous period's 8.6% growth.
Economic momentum will likely weaken in the final quarter due to the fresh wave of Covid-19 and supply constraints.
Author: Oliver Reynolds, Economist