Swiss lower 2025 growth forecast as global trade war looms

ZURICH (Reuters) - The Swiss economy will grow by 1.4% in 2025, the government said in its latest forecast on Tuesday, lowering its previous view due to uncertainty and worries about a global trade war.

The forecast was a slight downgrade from December's forecast for a 1.5% increase and was below the long term average growth rate for Switzerland of 1.8%.

The experts group at the State Secretariat for Economic Affairs (SECO) said they expect the Swiss economy in 2026 to grow by 1.6%, down from its previous forecast for a 1.7% growth rate.

"The current forecasts assume that there will be no escalating global trade war," SECO said. "Nevertheless, some negative effects are to be expected," it said, highlighting how uncertainties were weighing on investment decisions and economic captivity.

Switzerland is traditionally one of Europe's more resilient economies. Still, some sectors have been struggling, particularly manufacturers, from a downturn in demand due to the weakness in Germany, one of Switzerland's main export markets.

Concerns have grown also around the rising risks of a global trade war, triggered by U.S. President Donald Trump ramping up tariffs and countermeasures announced by Europe.

Swiss industry, which struggled with lower sales and exports last year, has warned about the impact of U.S. and European tariffs which would hit 70% of Swiss tech exports.

Still, Swiss inflation is expected to remain low. Prices are expected to rise by 0.3% in 2025, the same as previously forecast, and by 0.6% in 2026.

Unemployment is expected to remain low, at 2.8% this year and 2026, slightly up from the 2.7% rate forecast previously.

(Reporting by John Revill, Editing by Friederike Heine)