Switzerland projection note OECD Economic Outlook November 2022

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Switzerland GDP is projected to grow by 0.6% in 2023 and 1.4% in 2024. Repercussions from Russia’s war of aggression against Ukraine will further weaken foreign demand and thus slow trade and investment. Low consumer confidence will moderate consumption. Rising electricity prices and wages will keep headline inflation above the Swiss National Bank’s target range in 2023, before moderating in 2024. Disruptions to industrial production due to natural gas or electricity shortages and a stronger weakening of global demand are key downside risks to activity. Monetary policy will need to be tightened further to contain core inflation and to ensure that long-term inflation expectations remain anchored. Fiscal consolidation should proceed as planned, but targeted measures to assist vulnerable refugees are warranted. Structural reforms are needed to boost labour market integration, remove barriers to competition, and raise energy efficiency to help ensure energy security and improve environmental sustainability. Growth momentum has weakened Economic growth has slowed. Real GDP rose by 0.3% in the second quarter of 2022, primarily driven by the recovery in services as remaining COVID-19 restrictions were lifted. Consumer confidence is at a record low amid heightened uncertainty surrounding the war, rising energy prices and elevated inflation. The KOF Economic Barometer remains subdued and the manufacturing PMI has declined. The labour market remains very tight, with low unemployment and a high number of vacancies. Headline inflation was 3.0% in October 2022, the highest rate since 2008, driven primarily by prices of energy and imported goods, while core inflation moderated to 1.8%. Medium-term inflation expectations remain below 2%, within the target-range of the Swiss National Bank.

Switzerland

Source: KOF Swiss Economic Institute; Swiss Association for Material Management and Purchasing; and Federal Statistical Office. StatLink 2 https://stat.link/qo0crb

OECD ECONOMIC OUTLOOK, VOLUME 2022 ISSUE 2: PRELIMINARY VERSION © OECD 2022


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