Switzerland Boosts Growth Outlook After Strong Second Quarter

(Bloomberg) — Switzerland said economic growth this year will be almost twice as fast as previously expected, while predicting inflation will stay comfortably within the central bank’s target range.

The State Secretariat for Economic Affairs now sees gross domestic product, adjusted for large sports events, expanding 1.7% in 2026, up from its June projection of 0.9%. For next year, it kept its projection at 1.6%.

The upgrade to the near-term outlook follows a surprisingly strong second quarter. But the agency, known as SECO, said that performance was driven by the volatile pharmaceutical sector “is likely to overstate underlying economic momentum.”

The improved outlook chimes with that of the OECD, which earlier this week significantly raised its own estimates. The Swiss economy has proven remarkably resilient this year amid high oil prices and ongoing tensions in the country’s trade relationship with the US. On Thursday, SECO highlighted both as risks to the outlook.

The agency kept its inflation forecasts unchanged, at 0.6% for this year and next.

That’s in line with the Swiss National Bank’s June forecasts. The central bank — which has an inflation target of 0-2% — will issue new predictions when it meets again on Sept. 24.

Policymakers are widely expected to keep their interest rate at zero then, while they may tweak language on their willingness to intervene on the franc, given that the currency has depreciated considerably against the euro recently.

Officials expect to leave the key rate on hold until the end of 2027, people familiar with the thinking inside the central bank told Bloomberg in July.

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