Switzerland Economic Forecast

Switzerland Economic Outlook

June 2, 2020

The economic panorama appears increasingly bleak in the second quarter, following an expected contraction in activity in the first quarter amid slumping industrial output. In April, the manufacturing PMI fell to a near 11-year low, while the services PMI hit a new record low as business activity and demand evaporated in the face of the pandemic. As a consequence, the unemployment rate climbed in the same month as the labor market continued to display significant damage. Furthermore, exports nosedived in April on limited external demand, while the KOF barometer for May hit a fresh low amid crumbling economic sentiment. More positively, the country entered the second phase of the easing of lockdown measures in mid-May, with a further lifting of domestic restrictions set to come on 8 June. Moreover, international borders should open in mid-June, boding well for all-important tourism revenues.

Switzerland Economic Growth

The economy is expected to shrink significantly this year: Falling income and rising unemployment will suppress consumer spending, while contracting investment will weigh further on overall activity. A large jump in government spending should soften the downturn, although a frail international trade outlook is a key risk going forward. FocusEconomics panelists project GDP to contract 6.1% in 2020, which is down 0.9 percentage points from last month’s forecast, and to grow 5.1% in 2021.

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Switzerland Facts

Value Change Date
Bond Yield-0.516.27 %Jan 01
Exchange Rate0.97-0.54 %Jan 01

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