Switzerland Says US Tariffs Will Cut Growth to 0.9% Next Year

(Bloomberg) — Switzerland’s government cut its growth forecast for next year, acknowledging that US tariffs will cause sizable damage to the economy.

Gross domestic product will grow just 0.9% in 2026, the State Secretariat for Economic Affairs said Thursday. That’s down from a previous projection of 1.2%. This year’s 1.3% estimate was left unchanged.

The figures are the first government forecasts since a 39% levy on many exports to America took effect in August. Economists already cut their predictions and analysts polled by Bloomberg expect that a reading for the third quarter will show stagnation.

“The current trade policy environment presents particular challenges for Switzerland,” the agency — known as SECO — said in a statement. “The additional tariffs are placing a heavy burden on affected sectors and export-oriented companies, with significant ripple effects expected across the broader economy.”

In an effort to lower the tariff, Bern has made an improved offer to Washington which includes investments in the US gold-refining industry. Still, a deal remains elusive.

Swiss National Bank President Martin Schlegel last month played down the impact of US levies, including that of additional charges on pharmaceuticals, and opted against an interest-rate cut.

While foreign sales to America dropped more than 20% in the first month of the 39% rate being in effect, increased shipments to other countries offset some of the fallout, bringing the overall retreat of Swiss exports to just 1%.

SECO also said that Swiss inflation will average at 0.2% this year and 0.5% next, matching the SNB’s forecasts.

–With assistance from Kristian Siedenburg.

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