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If the war in Ukraine continues for a long time, the Swiss economy will suffer greatly. Unemployment is likely to rise as a result.
Depending on the course of the war, the Swiss economy will be hit to varying degrees.
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If the war lasts a long time, it might be that all Russian energy and raw material exports from Russia to the EU will be stopped.
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The world economy is in crisis mode because of the Ukraine war.
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Depending on how long the war lasts, the Swiss economy suffers to varying degrees.
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In the worst case, gross domestic product (GDP) grows by just one percent and unemployment rises.
The war in Ukraine is putting pressure on the global economy. In particular, the sharp rise in energy and raw material prices is putting a strain on the economy. In addition, trade with Russia is excluded in all areas
that with energy has come to a virtual standstill.
Switzerland is also feeling the effects of the war: the gross domestic product (GDP) is growing less than expected, as reported by the economic research center KOF at ETH Zurich. Depending on the course of the war, the Swiss economy is likely to be hit to varying degrees.
The KOF expects a positive and a negative scenario. In the former, the war will soon come to an end. The economic consequences would then be limited to the second quarter of 2022. GDP growth would be 2.9 percent. Without war, GDP might have grown by 3.2 percent.
Unemployment might rise
But if the war lasts longer, it might be that all Russian energy and raw material exports from Russia to the EU are stopped. Then the energy prices would rise once more massively and it would come in
some European countries are increasingly leading to production restrictions.
Foreign demand for Swiss products would fall. GDP should then only grow by one percent in 2022. As a result, there is also a threat of an increase in unemployment in Switzerland. In sectors such as manufacturing, jobs would then be lost for several quarters.
Economy affected until 2023
If the war continues, GDP is likely to grow only slightly at 0.8 percent in 2023. In the favorable scenario, however, GDP should increase by 2.3 percent. In both cases, the rate is lower than in 2022: This is because the catch-up effects following the Corona crisis are gradually fading.
In both scenarios, the KOF assumes that there will be no reintroduction of contact restrictions due to the pandemic, as it will become endemic. However, there is a risk that a new, more dangerous virus variant will appear.
According to the KOF, the Ukraine war is also causing inflation to rise more sharply. Unlike parts of Europe and the US, where inflation is already in the double digits, inflation in Switzerland remains low. In a favorable scenario, consumer prices should rise by 1.6 percent. In 2023, however, the increase will already drop to 0.8 percent. If the war continues, inflation is likely to rise to 2.8 percent and 1.2 percent in 2023, as the KOF writes.
