Switzerland's Economic Growth and Inflation Outlook
Forecasted Growth Reduction for Switzerland in 2025 due to Economic Uncertainty
Our Swiss mates are planning ahead, and their economic forecasters have recently revamped their projections. Originally aiming for a 1.5% GDP growth in 2025, they've now whittled it down to a cool 1.4%. And for 2026? You guessed it! Expect 1.6% growth. Sounds like things are chugging along, albeit slower than historical averages, according to the ministry.
Why's that, you ask? Well, the world's economic soup is pretty darn murky right now, what with political and trade policies on everyone's tongues. A potential global trade war is on the horizon, and ol' Trump's been banging on about some hefty tariffs. If these economic wildcards turn sour, our Swiss friends might face some rough waters ahead.
But don't worry, they've got a Plan A and a Plan B up their sleeves. If everything goes south, exports might take a hit and domestic economic activity could slow down. Conversely, if Swiss exports surge and the economy experiences a growth spurt, they might just be in for a party. As it stands, though, those downside risks outweigh the upside potential for now.
Speaking of potential hits, they've kept their inflation expectations for 2025 at 0.3%, but nudged the 2026 projections down from 0.7% to 0.6%.
Now, let's talk figures. According to the OECD, 2025 could see 1.5% growth, but Goldman Sachs and Vanguard have different predictions. Goldman's going with a more pessimistic 0.7%, and Vanguard's sticking with a hopeful 1%. In 2026, Goldman projects a growth rate of 1.0%, while Vanguard anticipates a much zestier 1.6%.
As for inflation, fiercely debated, to say the least: Goldman has lowered their rate forecasts to 0.2% in Q4 2025 and 0.5% in Q4 2026. The main culprits? A Swiss Franc appreciation and, you guessed it, global economic conditions.
Don't count Switzerland out just yet, folks. They're bracing for some challenges, but with a "more extreme scenario" still possible, they're not going down without a fight!
Switzerland's finance ministry expects a potential retaliatory reshuffle in global trade policies, which might trigger lower business growth in Switzerland by 2025. In the event of a trade war, Switzerland expects a slowdown in export activities, resulting in a 1.4% GDP growth in 2025, as initially projected, while 2026 growth might slightly improve to 1.6%. Despite the downside risks, Swiss inflation expectations for 2025 remain at 0.3%, but have been revised from 0.7% to 0.6% for 2026, as a consequence of a Swiss Franc appreciation and turbulent global economic conditions.
