Consumption, work, export: this is how the Swiss economy continues


The Swiss economy should start to pick up again next year. However, a recovery will not be possible in 2021.

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These are the economic forecasts from Raiffeisen Switzerland for 2021:

These are the economic forecasts from Raiffeisen Switzerland for 2021:

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“Overall, the Swiss economy should come through the crisis comparatively lightly,” says chief economist Martin Neff.

Raiffeisen Switzerland

  • Raiffeisen Switzerland is cautiously optimistic about the future.

  • GDP is expected to grow again as early as 2021.

  • But this year’s minus cannot be made up for.

After a tough year of pandemics, Switzerland is likely to see economic growth again next year. Raiffeisen Switzerland is forecasting an increase of 2.8 percent. However, that will not be enough to fully offset the setback suffered in 2020. This year, the bank expects GDP to fall by 3.3 percent.

“Overall, the Swiss economy should come through the crisis comparatively lightly,” says chief economist Martin Neff. Because of the great uncertainty about the further development of the pandemic, it is very difficult to make reliable economic forecasts. Nevertheless, he dares to make an initial assessment of various developments in the Swiss economy in the coming year:


Consumption in Switzerland collapsed during the crisis – Neff expects a minus of 4.5 percent for 2020 as a whole. According to the economist, this will quickly turn around again in 2021 with a plus of 5.1 percent. The improvement does not affect the relatively stable factors such as health care costs and taxes, which account for around two thirds of private consumption. Instead, in 2021 the Swiss are likely to spend more money again on typical private consumption when shopping, going out or on vacation. “You can tell that the population has had to do without it for a long time,” says Neff.


Next year, unemployment in Switzerland is likely to rise rather than fall. Raiffeisen expects an average unemployment rate of 3.5 percent in 2021, compared to 3.2 percent in 2020. According to Neff, it will not fall again until 2022. Why is the number of unemployed lagging behind? “In the summer, many companies hoped to get through the crisis with the bridging aid, which has now been hit hard by the second wave. We are therefore assuming an increase in bankruptcies, ”explains Neff. As a result, there could be layoffs that were virtually postponed at the beginning of the crisis.


Because many Swiss work from home during the crisis, the need for housing has risen in many cases, says Neff: “Many are really at home for the first time and notice that they need more space or perhaps want a balcony.” Because vacancies are high on the rental market, the new needs will not initially ensure that rents will rise. It is still the other way around in the case of residential property: prices are high there because supply is scarce.

Swiss franc rate

The franc has weakened somewhat in the past few weeks. “Investors’ fear of risk has subsided somewhat – mainly because of hopes for a vaccine,” said Neff. That spurred the financial markets. Investors therefore took refuge in the franc less, and the exchange rate eased somewhat. However, a massive weakening is not to be expected. Currently, one euro costs 1.08 francs. In twelve months, Raiffeisen expects an exchange rate of 1.09 francs per euro.


As an export-dependent country, Switzerland is suffering from the 4.7 percent predicted drop in exports for 2020. In 2021, however, this will almost be compensated for with a plus of 4.2 percent. “If you don’t work in industry, you won’t notice much of it right away,” says Neff. But if the export industry were to suffer from the crisis any longer, it would cost the state an additional million francs – for example in the form of short-time work compensation. The taxpayer pays for this. “All Swiss will therefore benefit from the recovery in the export economy.”

The crash of the Swiss economy due to the corona pandemic is likely to be massive in 2020. In its basic scenario, the Economic Research Center (KOF) at ETH Zurich expects GDP to decline by 3.6 percent. If the pandemic situation worsens further, the decline could also be much more pronounced. With a minus of 3.3 percent, Raiffeisen Switzerland’s forecast is even more optimistic. The bank expects a recovery towards the middle of 2022. The KOF, on the other hand, does not expect it until 2023.

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