Swiss gross domestic product (GDP) is expected to grow by 3.2% in 2021, upgraded from 2.2% in the previous forecast, according to the Organisation for Economic Co-operation and Development (OECD). The organisation predicts GDP growth of 2.2% in 2022 for the Alpine nation.
The organisation of industrialised countries attributes the higher forecast for Switzerland to the easing of measures put in place to curb the pandemic as the public health crisis subsides.
Improving labour market prospects and the gradual decline of the currently high savings rate will boost consumption growth, according to its global outlook published on Monday.
As uncertainty recedes, investment activity should also pick up in Switzerland, the OECD predicts. It also says deflationary tendencies will probably subside during the recovery, but inflation is likely to remain well below the upper end of the target corridor.
The OECD credits the Swiss government for moving fast to support employment and incomes during the downturn. It recommends the country adapts fiscal measures to provide targeted support to economically viable jobs and businesses.
Switzerland should maintain its loose monetary policy and speed up structural reforms, especially those that improve the business environment and remove internal barriers to competition, the group advises.
Globally, the economic rebound from the pandemic is also gaining momentum. The OECD forecast global output will rise 5.8%, raising its forecast from 4.8% during the previous outlook in December 2020.
It noted that relief and stimulus measures in more industrialised countries had helped to shield economies from recession during the pandemic recession and are now helping to put them back on the path of growth.
However, the OECD notes that the health situation remains uncertain. Lack of vaccines in poorer nations could lead to new virus variants and more stop-and-go lockdowns.
As long as the vast majority of the global population is not vaccinated, the report says, “all of us remain vulnerable to the emergence of new variants”.
The OECD also said most individual countries would reach pre-pandemic levels of output by the end of 2022, but cautioned “this is far from enough.”
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