Trade tensions coupled with a slowdown in Europe are likely to take a toll on the Swiss economy over the next two years, the OECD forecasts.
The Organisation for Economic Co-operation and Development (OECD) has revised its growth forecasts downwards for Switzerland. It also recommended Switzerland raise its retirement age.
Swiss GDP is expected to grow by 0.8% this year and by 1.4% in 2020, according to an OECD report published on Monday. Previously, Swiss economic growth had been projected at 1% and 1.5% in these respective years.
The Paris-based organisation blames a lack of vitality in foreign trade and investment, although these unfavourable factors are offset by low unemployment and robust domestic consumption.
Swiss growth will be close to its trend level, according to the OECD report, which states that higher wages and a strong labour market will support consumption.
Global tensions “are one of the main risks” on the horizon, while negative interest rates are another source of concern. In this context, the OECD recommends Switzerland spend more in order to set inflation on an “upward trajectory”.
The OECD report also includes a section on population and ageing. The institution recommends setting the retirement age in Switzerland at 65 for both sexes, then gradually increasing it to 67 in line with increased life expectancy. Currently, the statutory retirement age is 65 for men and 64 for women.