by Many people in Switzerland will be counting their change more carefully. (© Keystone / Christian Beutler) In a revised forecast in the wake of the coronavirus pandemic, federal authorities predict GDP will contract by 6.7% in 2020 and recover slowly in 2021. On Thursday, the State Secretariat for Economic Affairs (SECO) announced that it had adjusted 2020 economic forecasts to take into account sporting events affected by the pandemic. The original revised forecast estimated the economy would contract by 1.5%.external link Unemployment is expected to average 3.9% over the year. In a press releaseexternal link, SECO warned that this would make it the biggest slump in economic activity since 1975. This is a more dire prediction than that of the BAK Economics
Topics:
Swissinfo considers the following as important: 3) Swiss Markets and News, 3.) Swiss Info, Business, Featured, newsletter
This could be interesting, too:
Frank Shostak writes Assumptions in Economics and in the Real World
Conor Sanderson writes The Betrayal of Free Speech: Elon Musk Buckles to Government Censorship, Again
Nachrichten Ticker - www.finanzen.ch writes Bitcoin erstmals über 80.000 US-Dollar
Nachrichten Ticker - www.finanzen.ch writes Kraken kündigt eigene Blockchain ‘Ink’ an – Neue Ära für den Krypto-Markt?
Many people in Switzerland will be counting their change more carefully. (© Keystone / Christian Beutler)
In a revised forecast in the wake of the coronavirus pandemic, federal authorities predict GDP will contract by 6.7% in 2020 and recover slowly in 2021.
On Thursday, the State Secretariat for Economic Affairs (SECO) announced that it had adjusted 2020 economic forecasts to take into account sporting events affected by the pandemic. The original revised forecast estimated the economy would contract by 1.5%.external link Unemployment is expected to average 3.9% over the year.
In a press releaseexternal link, SECO warned that this would make it the biggest slump in economic activity since 1975.
This is a more dire prediction than that of the BAK Economics Instituteexternal link, a Basel-based think tank, which at the end of March predicted a drop in GDP of 2.5% in 2020.
The forecast expects a modest recovery with the easing of restrictions in the next few months. However, income losses due to high rates of partial and full unemployment as well as the considerable economic uncertainty “will limit the amount of lost ground that private consumption will be able to make up in the second half of the year”, according to the economic ministry.
Rising government debt in many countries as well as further upheaval in the financial markets and Swiss real estate sector could also exacerbate risks. Switzerland is also heavily affected by the decision to postpone the 2020 Olympic Gamesexternal link and other major sporting events given the large number of sporting associations in the country.
Assuming no further restrictive measures, the Swiss economy should continue its fragile recovery in 2021, with GDP forecasted to grow by 5.2%. Unemployment is set to rise further to 4.1% in 2021, with employment only likely to see a minimal rise.
Social benefit payouts
The economic lockdown measures to contain the coronavirus have led to a spike in requests for social assistance. In the first two weeks after the government declared an “exceptional situation”, the number of welfare applications quadrupled.
This is according to a studyexternal link by the Zurich University of Applied Sciences, which found that those most affected were hourly wage workers, those in part-time jobs and the self-employed.
You Might Also Like
Surviving Covid-19: the Swiss economy’s strengths and weaknesses
The current pandemic will plunge the world economy into recession, at least in the first part of the year. What tools does Switzerland have to minimise the economic and social damage of this crisis? And what factors could jeopardise the prospects for an economic recovery?
More high-profile brands desert the Baselworld fair
Rolex, Patek Philippe and Chanel will not exhibit at the Baselworld watch and jewellery trade show in 2021. The announcement marks another blow to the event, which has already seen high-profile exits, including by the Swatch Group.
Ranking finds Swiss cities less expensive
Zurich and Geneva are still among the world’s ten most expensive cities, but both have slid down the rankings since last year. The full effect of the coronavirus crisis remains to be seen. In the Economist Intelligence Unit’s annual report comparing the cost of living in cities around the world, Zurich is tied for 5th place with Paris; in 2019 it ranked 4th.
Digital grassroots response to government bailouts
The CHF60 billion Swiss state bailout of companies is well underway. But there is a feeling that government funds that hand out loans and pay workers’ wages will not be enough. How do companies maintain contact with customers and develop their brands during a lockdown?
Interest groups present demands for coronavirus exit plans
Political parties, trade unions and other interest groups have published their proposals for the government to relax restrictions introduced to stem the Covid-19 pandemic. The calls come a day ahead of the government’s decision on a nationwide coronavirus exit strategy, notably a staggered resumption of business activities and the reopening of schools.
Pandemic takes a heavy toll on consumer confidence
Switzerland’s consumer confidence index plummeted to a “historically low” level in April, according to a Wednesday statement from the Secretariat for Economic Affairs (SECO). The index fell to -40 points, compared to -9 points in January, when the previous survey was conducted. That marks the lowest results since the early 1990s.
Is Venezuela’s gold a liability for Switzerland?
Venezuela is illegally mining and trading in gold, and Switzerland could be one of its clients, according to Swiss media reports. swissinfo.ch spoke to law enforcement, customs and financial authorities to find out whether they are taking action.
How Swiss drones and robots are changing farming
Remote sensing, big data, artificial intelligence and robotics are being integrated into everyday farm management. Based on information relayed by a Swiss start-up, the owner of a sugar mill in India tells local cane farmers it’s almost time to harvest their crop.
Tags: Business,Featured,newsletter