Swiss Economy to Grow Less Than Expected in 2023, 2024December 14, 2023
A group of experts from the Switzerland’s Ministry of the Economy are now foreseeing gross domestic product (GDP) in 2024 excluding sporting events to grow by 1.1%. Slightly lower compared with the previous forecast of 1.2%. This is due to the drop of exports triggered by slow momentum in the eurozone economy. Switzerland exports mainly to European Union countries. Exports of goods should grow by 2.7% in 2024, compared with 4.1% previously put in an outlook. "Investment is expected to grow only slightly in the face of falling demand and rising financing costs", said the Ministry of the Economy in a statement. When it comes to this year, the growth forecast was left at 1.3% with an observation that economic situation is mixed globally. As the US data for Q3 was exceeding expectations, in the eurozone, especially in Germany, the situation was otherwise. "While we can expect international monetary policy to continue to exert a slowing effect, there is no global recession in sight", the analysts said. For 2025 analysts expects Swiss economy to grow by 1.7%, due to "a gradual recovery in the global economy, particularly in Europe".
Interest Rates Stable
Meanwhile the Swiss National Bank (SNB) has decided once again to keep interest rates unchanged at a 1.75% level. This decision was in line with expectations of analysts. Inflation is easing, however unpredictability in the global economy sill is an issue, according to the SNB. In a statement the central bank’s representatives said that the global economic growth was stronger than expected in the Q3, that is why the rates will remain unchanged for now. The SNB is still open though to adjust its policy and hike rates if necessary – if inflation gets above its range. As of now there is no such need, as inflation is under control in some part due to the good exchange rate of Swiss franc. High exchange rate of CHF versus other currencies aids keeping inflation at bay. Inflation in Switzerland stood at 1.4% in November – well below its 2% target. The central bank attributed this good result to lower inflation on goods and tourism. "However, inflation is likely to increase again somewhat in the coming months due to higher electricity prices and rents, as well as the rise in VAT," the SNB said.