OECD raises growth forecast for Swiss economy

The OECD expects the Swiss economy to grow by 1.5% in 2025, it said in its "Economic Outlook" on Wednesday. Keystone-SDA

The Swiss economy is growing slightly faster than expected, according to the Organization for Economic Cooperation and Development (OECD).

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The OECD expects annual gross domestic product (GDP) growth of 1.5% for 2025, it said in its “Economic Outlook” on Wednesday. Previously, it had assumed growth of 1.4%. For this year GDP growth should reach 1.3%; its earlier forecast was 1.1%.

According to its new outlook, the OECD expects a more significant acceleration in the economy in 2026, with annual growth estimated to hit 1.9%.

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Consumption helps

The growth of the economy will be driven by a recovery in private consumption and rising employment, OECD experts predict. Falling inflation and better financing conditions should also help. In terms of inflation, the OECD predicts an inflation rate of 1.1% for 2024, and 0.9% and 1.0% in 2025 and 2026, respectively.

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Among the risks, economists cite worse-than-expected developments in Germany in particular, but also in the United States and China. They also underline that the banking sector is susceptible to international economic downturns. The conditions on the global financial markets have a notable impact on the wealth management business for private and institutional clients.

Demographic challenges

According to the OECD, Switzerland will have to carry out long-term structural reforms due to demographic challenges. Possible measures include an automatic adjustment of the retirement age in line with rising life expectancy and stronger incentives for later retirement, it suggests.

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The organisation says Switzerland should also accelerate adjustments to hit international climate targets, particularly via a faster transition to green energy sources for transport and the construction sector. The Alpine country could also make further progress in productivity by promoting the digital transformation, the report concludes.

Translated from German by DeepL/sb

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