Swiss annual growth forecast takes a cut

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Manufacturing has picked up, but not overall growth. (Keystone)

Swiss economic growth estimates for the year have been revised down to under 1% by the State Secretariat for Economic Affairs (SECO). This would make it the slowest year since 2009.

The stats released Thursday predict a growth rate of 0.9% for 2017. The figure has fallen from previous estimates of 1.4%, and would mark the worst-performing economic year since a 2.2% contraction in 2009.

The reasons why the economy is “only gradually resuming a stronger growth trajectory,” as SECO put it, include slow growth in most service sectors. It also comes despite an uptick in the performance of the manufacturing, hotel and catering industries, it said.

The figures follow similar downgrading of expectations by the Swiss National Bank and, earlier this week, Crédit Suisse, which revised its forecast from 1.5% to 1%, noting decreased dynamism of some recent growth drivers, including high immigration and a housing boom.

Recovery to come

In its summationexternal link, SECO was optimistic that stronger growth would take off again next year, and predicted a rate of 2% for 2018, notably driven by predicted global growth and the effect of the current depreciation of the Swiss franc.

“The Swiss export sector is benefiting from the healthy global economy, and will do so all the more if the Swiss franc, which has depreciated in the summer, maintains its new level,” it wrote.

It also said that “domestic demand also expected to gain momentum,” (from 2018), with private consumption set to achieve moderate growth.

The jobs picture is also tipped to slowly improve: a 0.8% rise next year, SECO claims, should bring the anticipated unemployment rate down to 3.0%.