Growth rate predicted to pick up

The Swiss economy recently managed to avoid a recession despite the strong franc Keystone

A prestigious economic research centre forecasts a growth rate of 1.5% for the Swiss economy in 2017 – unchanged from last year – but more improvement after that buoyed by a modest recovery in the eurozone and rising consumer spending.

The Swiss Economic Institute, part of the Swiss federal technology institute ETH Zurich, said on Wednesday that “the Swiss economy is in good shape and growth prospects are encouraging – not least due to the recent recovery of the euro area”.

Its forecast said that after a difficult period for many Swiss companies, economic indicators show Swiss economic growth on track to grow by 1.9% next year. As European and emerging markets improve, the institute said, demand for Swiss products and services should grow.

“As in the past year, Swiss foreign trade is likely to be dominated by the development in pharmaceutical exports. Pulled along by the stronger export development, imports are expected to grow as well,” the institute reportedExternal link. “The economic recovery should lead to a slow rise in investments.”

But sluggish employment growth is likely to hold back any major improvement of the unemployment rate. Though inflation is returning to a positive rate, a significant increase in prices is not expected.

Government view

Economic forecasts by the government’s expert group little more than a week ago said Swiss economic growth “turned out disappointingly weak in the second half of 2016”.

It had a slightly more optimistic view than the institute in Zurich, forecasting a growth rate of 1.6% in 2017 owing in part to a “clear upward trend” in the first few months and positive signals from the global economy. The government experts, however, agreed with the institute on a 1.9% growth rate for 2018.

“The global economy gathered some speed towards the end of 2016,” the experts said in a statementExternal link from the State Secretariat for Economic Affairs (SECO). “Global industrial output and international trade have gained momentum and sentiment indicators around the world, including the global Purchasing Managers’ Index (PMI) for industry, are indicating a positive start to 2017.”