The main reason for the lowered prospects is the war in Ukraine, which is affecting the global economy as well as hampering Swiss exports and domestic demand, the OECD said on Tuesday.
For 2023, the group forecasts Swiss growth of 0.6%, down from 1.4% previously estimated. In 2024, the OECD says, expansion will recover a bit to +1.4%. The economists expect that Swiss consumers will gradually begin to reduce their extremely high savings rate and start spending more.
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Explainer: how Switzerland is dealing with rising prices
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Inflation is comparatively moderate in Switzerland, but rising energy and food prices are putting a strain on small budgets.
Rising energy prices will also keep inflation well above the Swiss National Bank’s (SNB) target range: the OECD expects a rate of 2.9% for 2022, with only a slight drop to 2.5% in 2024.
The OECD also states that the SNB will therefore have to further tighten its monetary policy. In September this year, the Swiss central bank raised interest rates to positive territory for the first time in seven years.
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Czech President Petr Pavel and his wife, Eva Pavlova, arrived in Switzerland on Tuesday at the start of a two-day state visit.
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Too soon to say inflation has peaked, says SNB boss
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The president of the Swiss National Bank (SNB) says the inflation outlook is more uncertain than normal and it is premature to say prices have peaked.
SNB board member says more rate hikes may be needed
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The Swiss National Bank (SNB) may raise interest rates again to fight Swiss inflation, says governing board member Andrea Maechler.
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