2023-12-13 08:01:59
State Secretariat for the Economy
Bern, 13.12.2023 – The expert group still expects sports-adjusted GDP growth to be significantly below average in 2024 (1.1% compared to 1.2% in the September forecast) . In the wake of the gradual recovery of the global economy, growth is expected to return to normal in 2025 (1.7%)*. Risks linked to the monetary environment remain a determining factor.
In the 3rd quarter of 2023, the Swiss economy experienced moderate growth, driven primarily by the services sector. Value creation showed a further decline in the branches of industry most sensitive to the economic situation. Many of the indicators currently show values below average and suggest moderate developments in the Swiss economy in the near future.
Until recently, the global situation offered a very mixed picture. In the 3rd quarter, the growth of the American economy exceeded expectations and China also recorded substantial growth. Conversely, the sluggish development observed in previous quarters was largely maintained in the euro zone and in Germany, particularly in the industrial sector. Overall, global demand is expected to grow weaker than its historical average over the forecast period. Although international monetary policy can be expected to continue to have a slowing effect, there is nevertheless no global recession in sight; developments in the labor markets remain favorable and inflation is falling internationally.
Given this context, the group of experts expects growth of the Swiss economy of 1.1% for 2024, compared to 1.3% during the current year (September forecast: 1.2% for 2024 compared to 1.3% in the current year). .3% in 2023), i.e. growth significantly below average for the second consecutive year. The Swiss export industry is expected to be affected by the sluggish dynamics in the euro zone in 2024. Investments are expected to grow weakly in the face of falling demand and rising financing costs. Private consumption should continue to provide support, and employment should continue to grow, although probably at a slower pace than initially expected. Under the effect of the economic slowdown, the annual average unemployment rate is expected to reach 2.3% for 2024, compared to 2.0% during the current year.
As in other countries, inflation is falling in Switzerland. From 2.1% for the whole of 2023 (September forecast: 2.2%), it should decline to 1.9% in 2024 (forecasts unchanged). Surveys carried out among companies suggest an easing of pressure on prices given the drop recorded in purchasing prices and the high level of stocks; Furthermore, customs duties on industrial products will be eliminated from January 1, 2024. However, the increase in electricity prices, the increase in value added tax and the increase in rents should continue to increase. fuel inflation. Only from 2025 can we expect a significantly lower inflation rate (1.1%).
In terms of the real economy, it is in the second half of the forecast period that we can expect a certain normalization. The group of experts expects a gradual recovery of the global and particularly European economy in 2025, following two years of slowdown in economic activity. Therefore, Swiss exports and investments should also experience a recovery. In view of all these elements, the group of experts forecasts GDP growth adjusted for sporting events of 1.7% for 2025, with an annual average unemployment rate of 2.5%.
Economic risks
The economic risks are significant. First, geopolitical risks have increased following the armed conflict raging in the Middle East. An intensification of the conflict might in particular lead to a surge in oil prices, which would push inflation rates higher. Even independently of this factor, there remains the risk that a tightening of monetary policy will be perceived as necessary internationally given that the underlying inflation rate remains relatively high, which would constitute an additional drag on global demand. . Furthermore, the risks linked to international debt, the risks of corrections on the real estate and financial markets and the balance sheet risks that certain financial institutions might face might be exacerbated. Given the simultaneous rises in interest rates in many countries, the consequences of tightening monetary policy on the real economy might also prove greater than expected.
Risks for the international economy, and therefore for our country’s foreign trade, also arise from developments in Germany and China. German industry might decline in a much more pronounced manner, with a more vigorous braking effect than expected on the exposed sectors of the Swiss economy. Furthermore, it cannot be ruled out that the Chinese economy will slow down more sharply than expected due to the crisis in the real estate sector, the country’s high debt and the prevailing gloom among businesses and households.
Finally, the risks weighing on the energy sector remain, despite the current easing. These forecasts assume no energy shortages during the entire forecast period. In the event that Europe were plunged into a marked energy shortage leading to large-scale production shutdowns and a sharp decline in economic activity, Switzerland would probably also enter into recession and would also have to face a strong pressure on prices.
* For further information on the forecasts of the Federal Expert Group for Economic Forecasts, please consult the chapter “Subject forecasts” of the Economic Trends for Winter 2023/2024, as well as the page www.seco.admin .ch/economic-forecasts.
Address for sending questions
Eric Scheidegger, SECO, Head of the Economic Policy Directorate, +41 58 462 29 59
Felicitas Kemeny, SECO, Head of the Economic Sector, Economic Policy Directorate, +41 58 462 93 25
Fabian Maienfisch, Deputy Head of Communications and SECO spokesperson, tel. +41 58 462 40 20, [email protected]
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State Secretariat for the Economy
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