Switzerland’s GDP fell by –2.6 % in the 1st quarter of 2020, after rising by +0.3% in the previous quarter, according to a government press release.
Due to the coronavirus pandemic and the measures to contain it, economic activity in March was severely restricted, said the statement. A global slowdown also affected exports.
The service sector was the worst hit with accommodation and food services down -23.4%. Transport and communications (-5.1%), trade (-4.4%) and the healthcare sector (-3.9%) were also significantly impacted.
The only sectors experiencing growth were public administration (+0.8%) and finance (+2.3%).
One driver of the slump was declining private consumption (-3.5%), particularly spending on furniture, clothing, mobility, leisure and health. The only domestic demand component rising was government consumption (+0.7%).
Switzerland’s key trading partners also saw their economic situation deteriorate significantly. This had a negative impact on manufacturing exports (-1.3%), such as precision instruments and watchmaking. However, growth in chemical and pharmaceutical exports offset this leading to an overall increase in Swiss exports (+3.4%).
Switzerland’s first quarter slump was relatively mild compared to many other nations. In the US GDP slumped -5.0% in Q1. Q1 GDP declines in the neighbouring nations of France (-5.3%) and Italy (-5.3%) were significantly larger than in Switzerland. Switzerland’s Q1 slump was similar in magnitude to Germany’s (-2.2%) and Austria’s (-2.6%).