Switzerland Cuts Growth View as Trade War Saps Foreign Demand
Switzerland Cuts Growth View as Trade War Saps Foreign Demand
(Bloomberg) --
The Swiss economy is expect to expand less quickly than previously anticipated, a knock-on effect of the trade war that’s weighing on demand across major economies.
Gross domestic output is seen expanding 0.8% this year, compared with the Swiss government’s previous forecast of 1.2%. The State Secretariat for Economic Affairs kept its 2020 prediction unchanged at 1.7%.
“The outlook has become gloomier,” with the franc’s appreciation in recent months hampering exports, it said on Tuesday. “A disorganized Brexit would significantly curb the European economy and thus indirectly affect Switzerland.”
With protectionism making life difficult for businesses, momentum is slowing in China and across Europe. Germany, the biggest destination for Swiss exports, is on the verge of recession. The franc hit a two-year high against the euro earlier this month and events such as a no-deal Brexit could cause it to strengthen further.
Contributing to the big cut in this year’s growth outlook was the fact that no major sporting events are being held this year, according to the SECO. Because Switzerland is home to sporting bodies like FIFA, UEFA and the International Olympic Committee, its gross domestic product figures get skewed when major events are held.
--With assistance from Jan Dahinten.
To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Jan Dahinten
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