What lies ahead for Switzerland: an economic outlook for 2025 

Zurich as the centre of the Swiss financial industry seems to have rebounded from the collapse of Credit Suisse. But the Credit Suisse saga is far from over. Keystone / Michael Buholzer

A solid growth outlook, search for efficiency in the food industry and uncertainty in the pharma sector: SWI swissinfo.ch journalists select the major developments that await the Swiss economy in 2025. 

The Swiss economy has proven to be resilient against global economic volatility and inflationary pressures in recent times. In 2025 the economy is expected to grow at a slightly faster pace but remain below its potential. The Organization for Economic Co-operation and Development (OECD), for example, has raised its growth outlook for Swiss gross domestic product (GDP) from 1.4% to 1.5% for the coming year.  

Meanwhile, the Swiss National Bank (SNB) faces the ongoing challenge of balancing controlling inflation with supporting economic growth. Interest rates may remain relatively low, though the central bank may adjust its monetary policy stance depending on global trends and domestic inflationary pressures.  

A strong labour market, particularly in high-skill sectors, such as finance, pharmaceuticals, and technology, will likely support consumption levels. Inflation is expected to be moderate, providing some relief to Swiss households after a period of rising costs. In many industries wage increases decided for 2025 amount to 1.7-2% and lie above inflation, the Swiss union Unia has reported. This should lead to an actual improvement in real wages. 

Let us have a closer look at six Swiss key industries: 

1. Swiss pharma braces for US regulatory uncertainty and global price pressure 

Elia Bianchi / Keystone

The two big Swiss pharmaceutical companies, Roche and Novartis, will look to gain momentum in 2025 after corporate restructurings. In November, Novartis lifted its 2023-2028 sales forecast in a sign of confidence after top-selling drugs exceeded quarterly growth targets. 

Roche is hoping a suite of new weight-loss drug candidates will show positive results in 2025 and help cement its place in what analysts predict could be a $100 billion (CHF88 billion) market in ten years. Although it is a newcomer to obesity, Chief Executive Officer Thomas Schinecker told reporters in July he believed Roche could bring the new drugs to market “much faster” than investors expect. 

The companies’ optimism faces headwinds though. Donald Trump’s return to the White House could lead to sweeping changes on drug prices, public health, and biotech funding in the industry’s largest market. 

Any attempts by Trump to expand drug pricing negotiations agreed under Biden will likely face strong pushback from industry. Pressure on drug prices is mounting beyond the United States. Even at home in Switzerland, companies will be under more scrutiny to justify the price tag for newly launched therapies amid rising healthcare costs. 

The Swiss pharma and biotech companies are also bracing for disruptions to global trade if the US and China continue to isolate each other. The life sciences industry, which makes up 40% of Swiss exports, relies heavily on global cooperation. Any move to cut off one part of the world from the supply chain could create hurdles for innovation in the sector. 

2. Food prices are likely to stabilise in 2025 – except chocolate 

Emmanuel Adegboye / Keystone

The continued rise in prices of raw materials like coffee and cocoa have put Swiss food companies in a bind. Six months after former Nestlé CEO Mark Schneider referred to food prices rises as a “50-year event”, he was no longer with the company. Nestlé’s sales were down, and the general feeling was that the company had scared away inflation-hit shoppers who had gone on to buy cheaper products. This dent in the customer base will be hard to turn around with new Nestlé CEO Laurent Freixe warning of a “soft demand environment” during the release of third quarter results this October. 

The year 2025 will be all about trying to bring cost-conscious consumers back. This task will be a painful one. Food companies will have to absorb the rise in prices of raw materials without passing them on to consumers.  

This will mean serious cost-cutting. In November, Nestlé announced that it planned to cut CHF2.5 billion in costs by 2027. The food industry is also getting rid of surplus capacity. For example, the Hero Group is closing its jam factory in Lenzburg, Switzerland, and moving production to its existing facility in Murcia, Spain. 

Despite cost-cutting measures, fans of Swiss chocolate will continue to have to pay more for their treats. Recent record cocoa prices will not be fully absorbed by chocolate manufacturers like Lindt & Sprüngli. Swiss chocolate firms can therefore expect stagnation or even decline in sales volumes in 2025 and loss of market share to cheaper competition who use less cocoa in their products.  

3. Financial sector on its way to recovery 

Jean-Christophe Bott / Keystone

The Swiss financial sector appears to have rebounded from the shock collapse of Credit Suisse last year. A stock market revival has inflated the assets of the richest people in the world, which is good news for Switzerland’s storied wealth management industry. But uncertainties and storm clouds continue to lurk, never far away. 

The Credit Suisse saga is far from over, despite the apparent seamless integration into its larger rival UBS. A parliamentary report into the debacle will likely spark a fresh regulatory shake-up next year. The Swiss government has already proposed a raft of measures, including extra capital requirements for banks and increased power for the financial regulator. 

Banks and asset managers are also campaigning against further regulations surrounding sustainable finance as they face increased pressure from non-governmental organisations. 

The Swiss stock market, under the new leadership of new CEO Bjørn Sibbern, will be watching how markets react to the new Trump presidency from next year. 

And the cloud of money laundering refuses to budge over the Swiss banking sector. Just as UBS was cleared of allegations relating to the Bulgarian mafia towards the end of the year, private bank Lombard Odier was hit with money laundering charges by Swiss prosecutors. 

4. Swiss watchmakers are no longer celebrating  

Fabrice Coffrini / AFP

After three years of post-Covid euphoria, the Swiss watchmaking industry returned to a more normal level in 2024. Watch exports fell by nearly 3% in value terms (provisional figures), due to sharp drops in demand in China (-26% at the end of November) and Hong Kong (-20%).  

No fundamental improvement is expected for 2025, however. “The lack of appetite among Chinese consumers for luxury products is the main reason for this complicated situation for the industry,” Jean-Philippe Bertschy, a watchmaking expert at Bank Vontobel, told SWI swissinfo.ch. Other markets have also begun to show negative trends in recent months.  

The downward trend in the number of watches exported and the consolidation of strong brands is likely to continue. “The top-of-the-range brands that offer high-quality, emotional products with a strong connection to their customers will continue to gain market share. It promises to be a very difficult year for the other brands, and for all the industry’s suppliers,” said Bertschy.  

5. A gloomy outlook for the machinery industry 

Michael Buholzer / Keystone

For the second year in a row, the Swiss machinery, electrical equipment and metals industry (MEM industries) saw sales fall in 2024 (-4% for the first nine months of the year). The industry’s umbrella association, Swissmem, blames this economic weakness on falling demand from the European Union, and Germany in particular.  

Germany and its crisis-hit automobile sector is a major source of concern for Swiss subcontractors. Exports to Switzerland’s biggest sales market fell by 8.4% in the first nine months of the year.   

A recovery is not expected any time soon. “In the best-case scenario, we can expect a stabilisation next year,” said Stefan Brupbacher, director of Swissmem, in a statement in mid-November. “On the other hand, if a ‘trade war’ were to break out between the United States, China and the EU, this would drag the Swiss tech industry, which exports 80% of its products, even further down.” 

6. Swiss tourism stabilises 

Laurent Gillieron / Keystone

The Swiss tourism sector had a very good year in 2024, with overnight stays expected to hit a new record of almost 47 million (up 14% on 2023). The coming months also look promising. The KOF Swiss Economic Institute is forecasting External linkgrowth in overnight stays of around 0.8% this winter.  

Travellers from the United States should continue to benefit from the strong dollar. During summer this year, the number of overnight stays recorded for tourists from North America rose by almost 300,000 (+14%), following an increase of 26% in 2023.  

Despite the weakening of the euro and the ongoing recession in Germany, the KOF expects overnight stays by European tourists to grow by 2% this winter. Meanwhile, local tourists are likely to “remain the most important group of visitors,” it says, even if a further decline is expected (-0.5%) in favour of long-distance travel.  

As far as the 2025 summer season is concerned, the KOF is forecasting an increase of 0.2% in overnight stays. While the European market is expected to remain stable, uncertainty reigns about China. Despite slow growth, total overnight stays by Chinese guests are only expected to reach 60% of the pre-Covid level (2019).  

Edited by Samuel Jaberg/Reto Gysi von Wartburg/sb