Economic forecasts presented by the State Secretariat for Economic Affairs (SECO) showed that Swiss GDP growth will slow down in 2023 to 1.1% from 2.1% in 2022. The previous forecast, published in December, assumed economic growth of 1% this year. Meanwhile, SECO expects GDP to increase by 1.5% next year, which is 0.1% lower than the previous forecast.
"GDP growth this year and next will be significantly below average (1.8% between 2012 and the pre-pandemic year 2019), but not drive the economy into recession. While the energy situation in Europe has improved, global inflation remains high," SECO said.
Switzerland has benefited from a mild winter which meant Europe skirted an energy crisis, while blockages and bottlenecks in supply chains have continued to ease.
As for the inflation outlook, SECO predicts that CPI growth slowed to 2.4% in 2023 from 2.8% in 2022. As for 2024, inflation is expected to fall to 1.5%.
The economic slowdown is also likely to have an effect on the labor market, albeit with a lag. Following an average rate of 2.0% in 2023, unemployment is projected to reach 2.3% in 2024.
The Swiss Central Bank will present its updated economic forecasts next Thursday, along with the interest rate decision.