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Swiss government predicts moderate economic growth in 2019

SECO warned that the flagging global economy was slowing Swiss trade abroad
SECO warned that the flagging global economy was slowing Swiss trade abroad: Keystone / Axel Heimken

The State Secretariat for Economic Affairs (SECO) is expecting the Swiss economy to grow by +1.2% in 2019, it said on Thursday. 

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. 

On Thursday, the KOF Swiss Economic InstituteExternal link was more optimistic. It expects gross domestic product (GDP) for 2019 to increase by 1.6%. 

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.”

These forecasts follows similar predictions by the Organisation for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) in May and April, respectively.

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