Swiss Government’s Export Group said prospects for 2020 are “less negative than feared in the middle of the year”. But “momentum is likely to weaken as time goes on”. The group expects GDP to fall by -3.8% this year. That’s much better than June forecast of -6.2%. That’s the biggest GDP contraction since 1975. Unemployment is to average 3.2% over the year as a whole, versus June forecasts of 3.8%.
For 2021, the Export Group expects GDP to grow by 3.8%, revised down from June’s 4.9%. Economic output would return to pre-crisis level “only towards the end of 2021”, assuming no further widespread lockdown in “Switzerland or in key trading partner countries”. Any improvement in the labor market is “expected to be slow at best”. Unemployment rise forecast to average 3.4% in 2021, revised down from June’s 4.1%.
SECO also said most significant economic crisis are still linked to the coronavirus pandemic. International trade conflicts poses further risks to global economy, as well as hard Brexit. “The risk of upheaval on the financial markets and further upward pressure on the Swiss Franc also remains high”.