Adjusted Growth Projections for 2024
Economic experts predict a more restrained growth trajectory for Switzerland in 2023 and 2024, with a subsequent acceleration in the following year. The country has revised its growth forecast for 2024, attributing it to an expected decline in exports influenced by the “sluggish momentum” of the eurozone economy. The Ministry of the Economy’s group of experts now projects a 1.1% growth in gross domestic product (GDP), excluding sporting events, down from the earlier estimate of 1.2%. Exports of goods are anticipated to increase by 2.7% in 2024, compared to the previously forecasted 4.1%.
Factors Impacting Economic Variables
The Ministry of the Economy highlighted that investment is expected to experience marginal growth due to diminishing demand and escalating financing costs. Despite these challenges, the statement underscores that private consumption is anticipated to remain a pillar of support for the Swiss economy. While the 2023 growth forecast remains at 1.3%, analysts acknowledge a mixed global economic picture, with the US surpassing expectations in the third quarter, contrasting with subdued developments in the eurozone, particularly in German industry.
Current Economic Landscape
The Swiss economy exhibited moderate growth in the third quarter, primarily attributed to the services sector, while more economically sensitive industries contracted. The analysts, cautious about the ongoing global economic impact, assert that while international monetary policy may exert a slowing effect, there is currently no indication of a global recession. Additionally, favorable conditions persist in labor markets, and inflation shows signs of easing. The analysts, who regularly update their forecasts every three months, expect the Swiss economy to grow below its historical average in 2023 and 2024, with a projected acceleration in 2025 due to a gradual recovery in the global economy, particularly in Europe.
Outlook for 2025 and Expert Opinions
In 2025, the group of analysts envisions a growth rate of 1.7% for the Swiss economy. Meanwhile, the KOF economic institute offers a slightly more optimistic forecast, projecting GDP growth of 1.2% in 2023 and 1.3% in 2024. The institute underscores the challenging global economic environment as a significant factor clouding the outlook for the Swiss economy. Their analysis suggests that the Swiss economy will primarily rely on domestic activity until 2025, while weak global economic conditions will curb foreign trade.
SOURCE: Ref Image from Irish Examiner
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