Swiss government has revised its GDP forecast for the current and next years

The State Secretariat for Economic Affairs (SECO) has slightly revised its 2025 economic growth forecast for Switzerland to 1.4% (December forecast: 1.5%).

This means the Swiss economy would underperform its historical average (1.8%), following two years of modest expansion. 

Domestic demand is expected to provide stability. 

Low inflation (2025 annual average: 0.3%, forecast unchanged) will bolster household spending, while employment is projected to increase marginally. 

The construction sector is also anticipated to continue its recovery

The SECO forecasts growth of 1.6% for the Swiss economy in 2026 (December forecast: 1.7%), with inflation likely to average 0.6% for the year (December forecast: 0.7%). 

The modest economic momentum continues to be accompanied by a slight increase in unemployment. The unemployment rate is expected to average 2.8% in 2025, followed by 2.8% in 2026 (December forecast: 2.7% for both years).

The uncertainty surrounding international economic and trade policy and their macroeconomic consequences remains exceptionally high. 

The current forecast assumes that there will be no escalating global trade war. However, more extreme scenarios remain possible. 

A weakening of international economic activity under a negative trade scenario would significantly impact Swiss exports and domestic economic activity. 

Conversely, global demand and economic activity in Europe could exceed current expectations, for example in the wake of a comprehensive fiscal package such as the one being considered in Germany.

Under such a positive scenario, demand for Swiss exports would strengthen and Switzerland would experience higher economic growth.

Overall, downside risks to the economy currently outweigh upside potential. 

Geopolitical risks persist, particularly relating to the armed conflicts in the Middle East and Ukraine. 

The risk of financial market corrections is likely to remain elevated. 

Inflation could prove more persistent than expected, potentially slowing the easing of monetary policy in major currency areas.