BAKBasel positive over 2017 economy

Exports are helping the economy: a crane unloads containers from a truck at the crane at the harbor Kleinhueningen, in Basel Keystone

Experts at the BAK Basel economic forecasting body have raised their economic forecast for Switzerland in 2017: They now see a growth in Growth Domestic Product of 2%, rather than their previous estimate of 1.7%.

The upswing is linked to exports and investments, BAKBasel said in a statement External linkon Friday. From 2018 private consumption will provide a boost as well.

“After the exceptional situation in the years since 2009, this prognosis is once again showing a stronger development towards a typical economic cycle structure,” it said, referring to the global financial crisis that has also affected Switzerland.

Overall, the Swiss economy should grow more strongly than that of the eurozone over the next two years. There are “excellent prospects for 2017”, it said. The forecast for 2018 is for more than 2% growth in GDP.

BAKBasel’s prediction is more positive than other economic forecasters. The big banks UBS and Credit Suisse have put growth for next year at 1.3% and 1.5% respectively. The KOF Swiss Economic Institute and the State Secretariat for Economic Affairs (Seco) have both put forward 1.8%.

More cautious

On Thursday, the Swiss business federation Economiesuisse maintained their growth forecast at 1.7% for 2017. It sounded a more cautious note.External link

“The economy must keep on getting fit,” it said in a statement. “The high costs in Switzerland, the global rapid structural changes and the still over-valued Swiss franc is forcing companies to further increase productivity.”

Chief economist Rudolf Minsch is expecting growth to be accompanied by small job cuts in lots of sectors. Employment will sink slightly to 3.2% in 2017. 

However, Minsch expects 2017 to end with inflation of 0.4% – the first positive rate since 2011.