Economic growth predicted for next two years

Cheap fuel means more money to spend on other things Keystone

For 2015, the KOF Swiss Economic Institute has raised its growth forecast for Gross Domestic Product from 1.7% to 1.9%. And 2016 is looking even better, with 2.1% growth expected.

“With the third quarter of 2014 turning out more favourably than expected, the Swiss export industry will benefit from the global recovery in the coming months. Both the trend in the industrialised countries and the consistently sizeable growth rates recorded by the Chinese economy are having a positive impact on the course of the economy,” said KOF in a statement on WednesdayExternal link.

It also mentioned the “collapse of oil prices”, noting that lower fuel prices help stimulate private spending.

“Stable income growth, the continuance of relatively high immigration and a low interest rate level will further encourage private consumption,” said KOF, predicting that private consumption will grow by 2.1% next year.

Imports are also expected to increase by 3.3%, thanks in part to investments in planes and train carriages. However, things are looking down for the construction industry, with a 0.6% decline in investments as the number of building applications is going down.

In terms of unemployment, KOF anticipates a rate of 3.1% for 2015 – down from the current rate of 4.1%.

As part of the Federal Institute of Technology in Zurich, KOF releases some of the world’s leading economic forecasts.