It revised its economic forecast upwards slightly from +1.1% in March, following 0.6% growth in the first quarter thanks to vigorous domestic demand.
In a statement on ThursdayExternal link, SECO warned that the flagging global economy was slowing Swiss trade abroad: “In the wake of the declining momentum in the international economy, the development of world trade is weak, and demand for Swiss products is flattening out, slowing down the export economy.”
It pointed to specific risks related to the US-China trade conflict, uncertainties surrounding Brexit and Italy’s financial situation.
However, SECO economists predict Swiss growth to pick up (+1.7%) in 2020.
“Provided that the international trade conflict does not intensify dramatically, the global economy and world trade will grow more strongly again in 2020. This will also support Switzerland’s exports,” it said.
It said: “The currently healthy state of the Swiss economy is mainly attributable to manufacturing. Since the Swiss franc has weakened in recent years and, adjusted for inflation, has reached a level similar to that prior to the abolition of the euro minimum exchange rate, manufacturing has again become more competitive and is generating more normal profit margins.”
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OECD lowers Swiss growth forecasts for 2019-2020
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Worsening international conditions will have a negative impact on Switzerland’s export-driven economy, says the Swiss Economic Institute (KOF).
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If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.