ZURICH (Reuters) – Switzerland’s economy will bounce back from its coronavirus-driven downturn to grow by 3% in 2021, the government said in its latest forecasts on Thursday, although it expects a weak start to the year.
GDP will likely fall “significantly” in the first quarter of 2021 following the reintroduction of restrictions last December, the State Secretariat for Economic Affairs (SECO) said.
But the easing of public health measures, already under way with the reopening of shops, should lead to rapid recovery afterwards, it added.
“Should the epidemiological development allow the gradual easing of coronavirus measures as intended, the domestic economy should recover very quickly,” SECO said.
“Consumer opportunities that were largely unavailable in the winter months would re-emerge and lead to turnover rising again.”
Growing global demand would also boost Switzerland’s export sector, while investment on production capacity will also increase, SECO said.
The Swiss economy contracted by 2.9% in 2020, its worst performance in more than 40 years, although the country avoided the deeper downturns in other countries by adopting a “lockdown light” approach which kept schools and many ski slopes open.
Bern has run a record budget deficit as it cranks up aid to the economy.
The government has launched a tentative reopening, with further steps expected on March 22 if the course of the pandemic allows.
The expected recovery in 2021 – in line with SECO’s December forecast – and will mean the Swiss economy returns to pre-crisis levels towards the end of the year, SECO said.
For 2022 SECO expects the economy to grow by 3.3%, up from its December forecast for a 3.1% increase.
The international economy has become more favourable since December, SECO said, which would benefit Swiss exports, while employment in the country is expect to rise considerably.
(Reporting by John Revill; Editing by Michael Shields)