Switzerland: Economy slows in Q4
Economic growth moderated in the final quarter, with GDP expanding 0.3% on a seasonally-adjusted quarter-on-quarter basis (Q3: +1.9% s.a. qoq). Q4’s reading marked the softest expansion since Q1, and came amid a rise in Covid-19 cases and an ensuing slight tightening of restrictions. Over 2021 as a whole however, the economy expanded a healthy 3.7% and fared well compared to European peers, with GDP now comfortably above pre-pandemic levels.
Private consumption growth fell to 0.3% in Q4, marking the weakest expansion since Q1 2021 (Q3: +2.7% s.a. qoq). Public consumption, meanwhile, bounced back, growing 1.0% in Q4 (Q3: -0.4% s.a. qoq). Fixed investment grew 1.5% in Q4, contrasting the 1.2% contraction logged in the prior quarter.
Exports of goods and services increased 1.9% on a seasonally-adjusted quarterly basis in the final quarter, which was below the third quarter’s 3.2% expansion. Conversely, imports of goods and services bounced back, growing 8.6% in Q4 (Q3: -0.8% s.a. qoq), marking the best reading since Q2 2013.
On an annual basis, economic growth moderated to 3.7% in Q4 from the previous period’s 3.8% growth.
The economy likely benefited in Q1 from the lifting of virtually all Covid-19 restrictions from mid-February. That said, the war in Ukraine likely put a slight dampener on momentum towards the end of the quarter, through softer sentiment and higher energy prices.
On the economy’s performance in 2021 as a whole, Charlotte de Montpellier, economist at ING, said:
“Over the year, Swiss manufacturing has done very well, with activity increasing by 11.2% after a 3% decline in 2020. This situation contrasts sharply with the rest of Europe where disruptions in supply chains have severely hampered industrial production. One reason for this difference is the importance of the chemical and pharmaceutical sector in Switzerland, which accounts for more than 43% of Swiss manufacturing output and has been much less affected by supply problems. At the end of 2021, production in the chemical and pharmaceutical sector was 20% higher than its pre-crisis level.”