Swiss Economy Grew Less Than Estimated at Start of the Year
(Bloomberg) — Switzerland’s economy grew slightly less than initially reported in the first quarter, weighed down by stalling consumer demand and a drop in investment.
Gross domestic product adjusted for large sport events rose 0.4% from the previous three months, according to the State Secretariat for Economic Affairs. That’s below the 0.5% reading previously announced.
The report shows momentum in the Swiss economy was sustained primarily by government spending, suggesting weakness took hold in the private sector even before the full impact of the Iran war hit consumers and businesses. That crisis also boosted demand for the safe-haven franc, leading to currency appreciation that may have squeezed exporters.
The output side of the economy shows a different picture. Manufacturing drove growth, as the industrial sector rebounded after several quarters of subdued performance. The overall expansion there came even as value added in Switzerland’s important chemical and pharmaceutical industry declined.
Separately, a purchasing managers’ index for manufacturing released on Monday unexpectedly rose to the highest level in more than three years. The factory gauge increased to 57.3 in May from 54.5, while economists had anticipated a drop.
The growth figures exclude data from large sport events because they can distort the overall picture of the country’s economy. Switzerland is the home to many global sports bodies, so when for instance the Olympic Games take place, earning revenue for the International Olympic Committee, that boosts Swiss GDP without benefiting economic activity.
While the situation in the Middle East continues to cloud the outlook, economists expect Switzerland to continue growing in the current quarter and in the rest of 2026.
Inflation, meanwhile, is seen accelerating, though it’s expected to stay comfortably within the central bank’s 0-2% target range. The latest data on consumer prices will be released on Thursday.
–With assistance from Kristian Siedenburg, Harumi Ichikura and Joel Rinneby.
(Updates with PMI in fifth paragraph)
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