Switzerland: Economy remains robust in Q2
September 1, 2022
GDP growth was unchanged at 0.3% on a seasonally-adjusted quarter-on-quarter basis in the second quarter. While domestic demand and services exports benefited from the lifting of pandemic restrictions, a double-digit decline in goods exports due to lower transit trade weighed notably on the overall reading.
Private consumption growth picked up to 1.4% seasonally-adjusted quarter-on-quarter in Q2 compared to a 0.4% expansion in Q1. Public spending was flat in Q2 (Q1: +0.2% s.a. qoq). Meanwhile, fixed investment bounced back, growing 1.7% in Q2, contrasting the 3.3% contraction logged in the prior quarter.
On the external front, exports of goods and services plunged at the steepest rate in over five years, contracting 10.3% in the second quarter (Q1: +1.7% s.a. qoq). In addition, imports of goods and services declined at a quicker pace of 5.2% in Q2 (Q1: -2.0% s.a. qoq).
On an annual basis, economic growth waned notably to 2.5% in Q2, compared to the previous quarter's 4.3% expansion.
Looking to Q3, activity is seen losing some steam in the face of higher inflation and interest rates, and softer external demand. However, the Swiss economy is still forecast to outperform most European peers, thanks to relatively muted price pressures and rock-bottom unemployment.
Author: Oliver Reynolds, Economist