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Switzerland Economic Forecast

Switzerland Economic Outlook

After mild growth in Q1, the economy flatlined in Q2 on a seasonally adjusted quarter-on-quarter basis, undershooting market expectations. Weaker readings for private consumption, public spending, fixed investment and exports drove the slowdown. Factors such as higher interest rates, soft overseas goods demand and the strong franc hitting exports likely all played a role in dampening economic activity in Q2. Turning to the third quarter, available figures are downbeat. Retail sales fell month on month in July, while surveys of businesses in the manufacturing and services industries pointed to deteriorating operating conditions for firms in July–August. That said, below-2% inflation and one of the lowest unemployment rates in Europe should be propping up private spending.

Switzerland Inflation

Inflation held steady at July’s 1.6% in August, above market expectations but in line with the Central Bank’s below-2% inflation target. August’s result was the joint-weakest inflation rate since December 2021. Inflation is forecast to average below 2% for the remainder of the year, with the recent uptick in oil prices partly offset by tighter monetary policy.

This chart displays Economic Growth (GDP, annual variation in %) for Switzerland from 2013 to 2022.

Switzerland Economic Data

2018 2019 2020 2021 2022
Imports (G&S, ann. var. %) 0.7 0.3 -3.0 5.6 6.0
Exports (G&S, ann. var. %) 3.3 -0.6 -5.6 13.6 6.3
Population (million) 8.5 8.5 8.6 8.7 8.7
GDP (USD bn) 725 722 741 812 818
GDP per capita (USD) 85,484 84,469 86,138 93,658 93,647
GDP (EUR bn) 615 645 650 687 779
GDP per capita (EUR) 72,453 75,464 75,560 79,229 89,093
GDP (CHF bn) 710 717 696 742 782
GDP per capita (CHF) 83,655 83,943 80,854 85,628 89,427
Economic Growth (Nominal GDP, ann. var. %) 3.7 1.1 -3.0 6.7 5.3
Economic Growth (GDP, ann. var. %) 2.9 1.2 -2.3 5.4 2.7
Domestic Demand (ann. var. %) 0.7 1.1 -1.9 2.3 2.6
Private Consumption (ann. var. %) 0.7 1.2 -3.4 1.8 4.2
Government Consumption (ann. var. %) 0.8 0.8 3.8 3.3 -0.8
Fixed Investment (ann. var. %) 0.8 0.9 -1.4 2.8 1.2
Industrial Production (ann. var. %) 5.8 4.4 -3.7 8.9 6.1
Retail Sales (ann. var. %) 0.8 1.0 1.4 4.6 -0.1
Disposable Income (ann. var. %) 1.7 1.8 2.6 1.4 -
Unemployment (% of active population, eop) 2.4 2.3 3.4 2.5 1.9
Unemployment (% of active population, aop) 2.5 2.3 3.2 3.0 2.2
Fiscal Balance (% of GDP) 1.3 1.3 -3.0 -0.5 -
Public Debt (% of GDP) 26.1 25.5 28.2 - -
Money (ann. var. of M2 %) 3.5 0.1 6.0 1.5 -3.1
Inflation (CPI, ann. var. %, eop) 0.7 0.2 -0.8 1.5 2.8
Inflation (CPI, ann. var. %, aop) 0.9 0.4 -0.7 0.6 2.8
SNB Policy Rate (%, eop) -0.75 -0.75 -0.75 -0.75 1.00
10-Year Bond Yield (%, eop) -0.15 -0.46 -0.53 -0.13 1.57
Stock Market (ann. var. of Swiss Market Index, %) -10.2 26.0 0.8 20.3 -16.7
Exchange Rate (CHF per USD, eop) 0.99 0.97 0.88 0.91 0.93
Exchange Rate (CHF per USD, aop) 0.98 0.99 0.94 0.91 0.95
Exchange Rate (CHF per EUR, eop) 1.13 1.09 1.08 1.04 0.99
Exchange Rate (CHF per EUR, aop) 1.15 1.11 1.07 1.08 1.00
Current Account Balance (USD bn) 40.9 28.4 3.3 72.0 81.1
Current Account Balance (% of GDP) 5.6 3.9 0.4 8.9 9.9
Merchandise Trade Balance (USD bn) 72.3 71.4 63.4 116.3 120.0
Foreign Direct Investment (USD bn) -101 -83 -50 -88 13

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