Top Stories
Swiss gov’t expects economic slowdown in 2023 but no recession
Global Banking & Finance Review®
Company
ZURICH (Reuters) – The Swiss government expects the country’s economic growth to slow next year although it should avoid a recession, it said on Tuesday, with no energy shortages causing widespread production losses.
ZURICH (Reuters) – The Swiss government expects the country’s economic growth to slow next year although it should avoid a recession, it said on Tuesday, with no energy shortages causing widespread production losses.
The economy will expand 2.0% this year, the same level as its September forecast, before growth slows to 1.0% in 2023, the State Secretariat for Economic Affairs (SECO) said.
“This would point to sluggish growth for the Swiss economy, but not a severe recession,” SECO said in a statement.
It had previously expected GDP to expand by 1.1% next year.
The figures, which are adjusted to remove the effect of large sporting events, assumed there will be no energy supply shortages either this or next winter.
“However, the energy situation in Europe is likely to remain tense with gas and electricity prices running high,” SECO said.
“Furthermore, high international inflation and the tightening of monetary policy are likely to curb demand.”
GDP was expected to expand by 1.6% in 2024, SECO said in its first forecast for that year, as the energy situation normalises, inflation eases and the global economy recovers.
Swiss inflation is expected to fall from a forecast 2.9% in 2022 to 2.2% next year, the department said, before dipping to 1.5% in 2024.
Switzerland’s economy is traditionally one of the more resilient in Europe due to its large pharmaceuticals sector and low unemployment.
Other agencies such as the KOF Institute have reduced their 2022 and 2023 growth forecasts, but still expect output to increase, while the PMI reading for November remained positive.
The Swiss National Bank is due to give its latest economic forecasts when it announces the outcome of its quarterly monetary policy review on Thursday.
(Reporting by John Revill; Editing by Michael Shields)
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real GDP.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
Monetary policy is the process by which a central bank manages the supply of money, interest rates, and inflation to achieve macroeconomic objectives like controlling inflation and ensuring economic stability.
Financial stability refers to a condition where the financial system operates effectively, with institutions able to manage risks and withstand shocks, ensuring the continuous flow of credit and economic activity.
Explore more articles in the Top Stories category
