Switzerland’s economy failed to expand in the second quarter of 2023, recording zero growth, according to data from the State Secretariat for Economic Affairs (SECO). In addition, economists are now lowering their growth forecasts for the year, reported SRF.
The economic slowdown is being driven by a number of economic headwinds. Slowing economies in Germany and Italy and the absence of an expected post-Covid rebound in China are impacting Swiss exports. In addition, central banks around the world are pushing up interest rates to tame inflation. This helps to bring down prices but dampens economic growth.
At the same time, SECO does not expect the Swiss economy to shrink in 2023, forecasting growth of around 1% across the year. Economists at UBS are less optimistic, forecasting growth of 0.7% for 2023, down from an earlier forecast of 0.7%, reported SRF.