Switzerland’s First GDP Drop Since 2023 Was Driven by Exports

(Bloomberg) — Switzerland’s first quarter of contraction in more than two years was driven by trade as pharmaceutical and chemicals exporters reeled from the impact of outsized US tariffs.

Gross domestic product adjusted for large sport events fell 0.5% in the three months through September from the prior period, according to the State Secretariat for Economic Affairs, confirming an initial estimate released last week. The decline compares to growth of 0.2% in the second quarter, revised up from 0.1% previously reported.

“This needs to be seen in the context of recent volatility in foreign trade,” officials said in a statement. “Strong exports of chemical and pharmaceutical products, driven also by front-loading effects linked to US trade policy, gave way to a compensatory decline in recent months.”

The new data complete the picture of how the economy fared before Bern and Washington sealed a framework trade deal this month that cut levies on many goods to 15% from 39%.

The lower tariffs are expected to enter force early next month, according to Swiss Economy Minister Guy Parmelin, while details are still being negotiated.

This was only the second quarter of contraction the country has reported since the Covid pandemic, still leaving it with a better track record than European peers. With the agreement reducing US tariffs in place, a snapback in growth appears feasible and many economists have raised forecasts accordingly.

The deal will provide particular relief for Swiss manufacturers of watches, machines and precision instruments. Along with food and chemicals producers, they were hit hardest by the US measures, according to Switzerland’s central bank. Other key exports like medicines and gold were and remain exempt from tariffs under the different regimes the US applies.

The growth report excludes data from large sport events because they can distort the overall picture of the country’s economy. Switzerland is the home to several global sports bodies, so when for instance the Olympic Games take place — earning revenue for the International Olympic Committee — that boosts output statistics without benefiting economic activity.

Without the adjustment, the outcomes for Swiss GDP matched the non-sporting data result.

–With assistance from Kristian Siedenburg, Joel Rinneby and Harumi Ichikura.

©2025 Bloomberg L.P.