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Swiss economy tipped to remain stagnant next year

High jump bar being adjusted
The 2020 Olympic Games is expected to raise the bar for the economy - but only temporarily. Keystone / Lukas Coch

The Swiss economy is not expected to see any sustainable growth until 2021 at the earliest, according to government forecasters. The Swiss National Bank (SNB) agreed, keeping negative interest rates unchanged.

A government expert group concluded that economic growth would rise only 0.9% this year, 1.7% in 2020 and 1.2% in 2021. However, much of the expected growth next year will be generated by one-off sporting events, including the Summer Olympics in Tokyo.

In its quarterly forecast, the group predicted a slow-down in construction activity and “much weaker” export growth in 2020 than in the previous four years.

“The international environment remains unfavourable. In particular, the weak growth can be expected to continue in the eurozone as well as in Germany, the single most important trading partner,” read a statementExternal link.

Switzerland’s central bank decided on Thursday to retain its -0.75% interest rate policyExternal link. The SNB predicts Swiss economic growth to achieve 1% by the end of this year and between 1.5% and 2% in 2020 – again driven by major sporting events rather than sustainable improvements in trade and demand for Swiss goods.

Switzerland’s economy is currently being underpinned by a low unemployment rate (around 2.3% according to the government) and strong pharmaceutical and chemicals sectorsExternal link, which see strong demand even during economic downturns.

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