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Experts lower Swiss growth forecasts due to US trade tensions

Trump-related uncertainties weigh on Swiss economy
Trump-related uncertainties weigh on Swiss economy Keystone-SDA

Uncertainties regarding the direction of Donald Trump’s new US administration are affecting Switzerland’s economic outlook. As a result, the BAK Economics market research institute is lowering its economic forecasts.

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According to the research institute, Switzerland’s Gross domestic product (GDP) is expected to grow by 1.2% this year and in 2026, down from previous estimates of 1.4% and 1.5%. Adjusted for sporting events, the growth figures are 0.8% and 1.7%, compared to the last estimates of 1.0% and 2.0%.

Trump’s tariffs and threats of tariffs are increasingly affecting global trade, according to BAK experts. They estimate that growth in this sector will be more than a third lower than previously forecast due to the imposed, suspended, or announced duties. More concerning, however, is the uncertainty caused by ongoing trade conflicts. In such an environment, companies are hesitant to make decisions, which significantly hinders investment.

In contrast to the export sector, Switzerland’s domestic economy remains robust, particularly in consumption and construction. This growth is driven by strong population increases due to high levels of immigration and the stable trends in inflation, interest rates and exchange rates.

BAK analysts predict that inflation will stay low but positive in 2025 and 2026, at 0.4% and 0.5% respectively. Given this outlook, the Swiss National Bank is expected to maintain its current policy.

Translated from Italian with DeepL/sp

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