The Group of Experts on Economic Forecasts expects a weakening of the Swiss economy in 2023 with significantly below average economic growth of 1.1% (adjusted for sporting events), says the State Secretariat for Economic Affairs (SECO) in its report. The forecast is based on the assumption that there will be no energy shortage with downtime in the coming winter of 2023–2024. At the same time, gas and electricity prices are expected to remain high in historical comparison.
Reduction of Jobs
The recent job cuts are an indication that the Swiss economy is not looking good in the second half of the year. The building supplier Arbonia, which employs approximately 6,300 people, is cutting up to 600 jobs. Rieter, a manufacturer of spinner cutting machines, cut up to 900 jobs since it had for a long time been struggling with weak demand in the textile industry. The medical company Idorsia has not raised enough funds for planned investments and is now planning to cut up to 500 jobs.
Swiss industrial companies are highly export-oriented. They feel that the economy in the main markets in Europe, the US, and China has recently cooled down. Moreover, central banks’ interest rate increases have an impact all over the world. Many buyers are wondering if they can afford to buy an expensive machine or a new building.
Budgets as a Boost to the Economy
On the other hand, private consumption in Switzerland is surprisingly good, which currently supports the economy in the country. People continue to spend a lot of money, and household spending is growing. Strong immigration also drives private consumption; when there are more people in the country, there is more spending. This will also encourage the service sector.
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According to the Group of Experts on Economic Forecasts (SECO), GDP is likely to move sideways. Over the whole year, weak real GDP growth of around 1% could result, mainly because the start of the year was still surprisingly strong. Economic observers do not expect a recession, but they also do not expect major growth momentum.
