Swiss housing on the lake with mountains in switzerland

Switzerland Economic Forecast

Switzerland Economic Outlook

After flatlining in Q4, the economy appeared to perform well in Q1. The services PMI and KOF Economic Barometer averaged higher in the quarter than in Q4. Moreover, retail sales rose 1.1% month-on-month in both January and February—albeit partly off the back of a low base effect in December—boding well for the private consumption outturn. Moreover, the fallout from Credit Suisse’s financial woes was seemingly contained by UBS’ swift government-backed takeover and liquidity provision from the Central Bank. Less positively, the export-focused manufacturing sector appeared to struggle in Q1; The PMI indicated worsening manufacturing operating conditions, likely due to soft goods demand abroad. In politics, the government recently signaled its intention to restart trade talks with the EU later this year; a revamped trade agreement will be crucial for the external sector’s long-term health.

Switzerland Inflation

Inflation came in at 2.9% in March, which was down from February’s 3.4% and undershot market expectations. Inflation is muted in the broader European context, but remains above the Central Bank’s target of less than 2%. Inflation is expected to move close to the Swiss National Bank (SNB)’s target range in H2 due to a more challenging base effect.

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

Switzerland Economic Data

2017 2018 2019 2020 2021
Population (million) 8.4 8.5 8.5 8.6 8.7
GDP (USD bn) 695 725 722 739 799
GDP per capita (USD) 82,589 85,483 84,468 85,902 92,197
GDP (EUR bn) 617 615 645 648 676
GDP per capita (EUR) 73,246 72,452 75,463 75,352 77,994
GDP (CHF bn) 685 710 717 694 731
GDP per capita (CHF) 81,308 83,654 83,942 80,631 84,292
Economic Growth (Nominal GDP, ann. var. %) 1.0 3.7 1.1 -3.3 5.3
Economic Growth (GDP, ann. var. %) 1.4 2.9 1.2 -2.5 4.2
Domestic Demand (ann. var. %) 1.8 0.7 1.1 -2.9 2.7
Private Consumption (ann. var. %) 1.2 0.6 1.2 -4.2 1.7
Government Consumption (ann. var. %) 1.0 0.8 0.8 3.5 3.5
Fixed Investment (ann. var. %) 3.5 0.8 0.9 -3.1 4.1
Exports (G&S, ann. var. %) -0.1 3.3 -0.6 -5.5 12.2
Imports (G&S, ann. var. %) -0.3 0.7 0.3 -3.0 4.9
Industrial Production (ann. var. %) 5.7 5.8 4.4 -3.7 8.9
Retail Sales (ann. var. %) 1.6 0.9 1.0 1.4 4.6
Disposable Income (ann. var. %) 0.3 1.7 1.8 2.6 1.4
Unemployment (% of active population, eop) 3.2 2.6 2.5 3.5 2.6
Unemployment (% of active population, aop) 3.1 2.5 2.3 3.1 3.0
Fiscal Balance (% of GDP) 1.1 1.3 1.3 -3.1 -0.4
Public Debt (% of GDP) 28.1 26.1 25.5 28.3 -
Money (ann. var. of M2 %) 4.0 3.5 0.1 6.0 1.5
Inflation (CPI, ann. var. %, eop) 0.8 0.7 0.2 -0.8 1.5
Inflation (CPI, ann. var. %, aop) 0.5 0.9 0.4 -0.7 0.6
SNB Policy Rate (%, eop) -0.75 -0.75 -0.75 -0.75 -0.75
10-Year Bond Yield (%, eop) -0.10 -0.15 -0.46 -0.53 -0.13
Stock Market (ann. var. of Swiss Market Index, %) 14.1 -10.2 26.0 0.8 20.3
Exchange Rate (CHF per USD, eop) 0.97 0.99 0.97 0.88 0.91
Exchange Rate (CHF per USD, aop) 0.98 0.98 0.99 0.94 0.91
Exchange Rate (CHF per EUR, eop) 1.17 1.13 1.09 1.08 1.04
Exchange Rate (CHF per EUR, aop) 1.11 1.15 1.11 1.07 1.08
Current Account Balance (USD bn) 37.2 40.9 28.4 3.1 70.5
Current Account Balance (% of GDP) 5.3 5.6 3.9 0.4 8.8
Merchandise Trade Balance (USD bn) 64.4 72.3 71.4 63.4 116.6
Foreign Direct Investment (USD bn) 111.2 -83.2 -105.8 -162.7 1.0

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