​Swiss economic growth forecast revised upward

The service sector is expected to drive an economic recovery in the latter part of the year. Keystone / Laurent Gillieron

Independent research group BAK Economics has revised its growth forecast for the Swiss economy upwards, as coronavirus restrictions are eased.

The Basel-based group now expects GDP to rise by 3.9% this year, compared with a previous forecast of 3.4%. On the other hand, it has revised its forecast for next year’s growth down to 3.2% (from 3.9%), it said on Friday.

With the Covid-19 situation easing, the research institutes predicts a sustained recovery for the second and third quarters of this year. “With a gradual opening up, it will be the service sectors driving economic growth,” it said. “At the same time, the industrial sector continues to show dynamic development.”

The upwards trend is following other predictions. Government experts also forecast in March a weak start to the year but said the economic situation should pick up quickly if the pandemic situation evolves positively.

Switzerland’s economy shrank 2.9% last year as a result of Covid-19, the worst annual contraction since the aftermath of the oil crisis in 1975. But official figures showed that the second wave in the autumn had a less harmful effect, with the economy growing 7.6% in the third quarter before slowing to +0.3% in the last three months of the year.