2023-06-07 10:41:00
Rising interest rates, sluggish economic conditions and inflation will weigh on Switzerland’s economic outlook, particularly on private spending and investment, warns the OECD.
The rise in prices should not return to the nails before 2024.
The Organization for Economic Co-operation and Development forecasts a gross domestic product (GDP) up 0.6% this year, down sharply compared to the post-Covid surge recorded in 2022 (+2.1%) and 2021 (+4.2%).
In 2024, growth should reaccelerate and reach +1.2%, detailed Thursday the economists of the international organization.
The war launched by Russia against Ukraine will continue to weigh down the morale of individuals and investors. Household spending is thus only expected at +1.4%, after 4% in 2022, and at 0.9% in 2024.
Exports should still be solid this year (+4.2%), before slowing down the next (+3.1%).
Stability target not yet achieved
‘Geopolitical tensions and growing uncertainty will hamper foreign trade,’ warned the OECD in its study. While banking sector fears are expected to ‘stay under control’, Switzerland’s gas supply next winter remains a concern.
On the inflation side, which slowed in May to 2.2% over one year after +2.6% the previous month, OECD economists do not expect it to fall below the 2% mark – representing the price stability objective sought by the SNB – before next year. Experts expect prices to rise 2.4% in 2023 and 1.2% in 2024.
“Monetary policy needs to be tightened further to ensure that inflation returns” to the Swiss National Bank’s target of inflation between 0% and 2%, the OECD added.
The issuing institution had raised its key rate to 1.5% in March and should proceed to a new tightening at its meeting on June 22.
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