Swiss Economy in Difficult Phase, Economy Minister Tells Paper

(Bloomberg) -- Switzerland’s government is bracing for a possible recession as the country’s economy goes through a difficult period and faces substantial risks, Economy Minister Guy Parmelin told a newspaper.

“There are several signs pointing to a slowdown,” Parmelin told Schweiz am Wochenende in an interview. “The trade war between the U.S. and China, the blockade of the WTO, the stagnating economy in Germany and other European countries. We are making preparations, also for a recession.”

The government’s forecast of an acceleration to 1.7% growth next year reflects the contribution from international sporting events like the Euro 2020 football championship as well as the Olympic Summer Games, according to Parmelin. “Unadulterated economic growth is probably slightly lower.”

Because Switzerland is home to sporting bodies like football’s FIFA and UEFA, as well as the International Olympic Committee, its gross domestic product figures get skewed when major events are held.

Parmelin also said he was making progress in negotiating a free-trade deal with the U.S. and that talks would continue after an hour-long meeting with U.S. Trade Representative Robert Lighthizer. Unlike in 2006, when trade talks failed over policies to protect Swiss farmers from competition, the U.S. focus has shifted to reducing the overall trade deficit with Switzerland as well as the strength of the country’s franc, he said.

To contact the reporter on this story: Jan Dahinten in Zurich at jdahinten@bloomberg.net

To contact the editors responsible for this story: Jan Dahinten at jdahinten@bloomberg.net, Marthe Fourcade, Jacqueline Mackenzie

©2019 Bloomberg L.P.