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OECD lowers growth forecast for Swiss economy

wallet and money
Bad news for Swiss wallets: rising prices and sluggish GDP growth. © Keystone / Gaetan Bally

The Organisation for Economic Co-operation and Development expects Swiss GDP to grow by 2.1% this year, down from a previous forecast of 2.5%.

The main reason for the lowered prospects is the war in Ukraine, which is affecting the global economy as well as hampering Swiss exports and domestic demand, the OECD said on Tuesday.

For 2023, the group forecasts Swiss growth of 0.6%, down from 1.4% previously estimated. In 2024, the OECD says, expansion will recover a bit to +1.4%. The economists expect that Swiss consumers will gradually begin to reduce their extremely high savings rate and start spending more.

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Rising energy prices will also keep inflation well above the Swiss National Bank’s (SNB) target range: the OECD expects a rate of 2.9% for 2022, with only a slight drop to 2.5% in 2024.

The OECD  also states that the SNB will therefore have to further tighten its monetary policy. In September this year, the Swiss central bank raised interest rates to positive territory for the first time in seven years.

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