The Swiss economy is likely to slow in 2019, with gross domestic product growth expected to hit 1.1%, followed by a “moderate” recovery in 2020, the International Monetary Fund said on Monday.
Other factors that are expected to impact growth include weak external demand, subdued domestic demand and the absence of biennial international sporting events. Inflation is expected to remain just below 1% this year.
The IMF growth figure is slightly lower than the latest Swiss National Bank (SNB) forecast from a few days ago (1.5%), while the State Secretariat for Economic Affairs (SECO) also predicted 1.1% growth for 2019. In 2018, GDP growth stood at 2.5%.
National risks
Rachel van Elkan, head of the IMF mission to Switzerland, told reporters in Bern on Monday that in general Swiss monetary policy had helped mitigate the effects of the strong franc and stabilise inflation. Public finances were strong, but more government investment could help support the economy, van Elkan noted.
At the national level, the IMF sees risks in Swiss real estate and in mortgage loans, where 85% of banks’ assets are concentrated. Pension funds and insurance companies are also highly exposed, it added.
The IMF also noted that uncertainties over corporate taxation and old-age pensions could increase volatility for business operations.
In their assessment, the IMF also recommended the Swiss authorities beef up the role of the Swiss Financial Market Supervisory Authority (FINMA) and increase the number of staff. It said the financial watchdog should be able to carry out more on-the-spot checks, especially on the largest banks.
The IMF delegation conducted the review of Switzerland from March 21 to April 1.
Popular Stories
More
Climate adaptation
Why Switzerland is among the ten fastest-warming countries in the world
Has your continent reached its peak or is there still potential for economic growth?
Some regions of the world are on an upward trajectory with the promise of a steadily improving future. Where do you live? And in which direction is your region or continent developing?
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Growth forecast lowered for Swiss economy
This content was published on
Worsening international conditions will have a negative impact on Switzerland’s export-driven economy, says the Swiss Economic Institute (KOF).
China slowdown and European populism unnerve luxury watchmakers
This content was published on
A stuttering start to the year for exports of Swiss watches has put brands on alert ahead as the Baselworld fair opens in Basel this week.
This content was published on
After some years of steady but low growth, the Swiss economy expanded by 2.5% in 2018 on the back of a positive global situation.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.