The Swiss government cut its growth forecast for 2025 and 2026 on Monday, as the export-orientated economy braces itself for the impact of the global trade war.
The Swiss economy, traditionally one of the most robust in Europe, is expected to grow by 1.3% in 2025, a downgrade from the government’s March forecast of 1.4%.
The State Secretariat for Economic Affairs (SECO) also cut its forecast for 2026 growth to 1.2% from 1.6% previously, with exports expected to fall.
Both figures, which were adjusted for the impact of sporting events, were below the country’s average growth rate of 1.8%.
“Uncertainty regarding international trade and economic policy remains high and is shaping the outlook for both the global and Swiss economies,” SECO said.
Although Switzerland had seen strong economic growth at the start of the year, this was driven largely by exporters rushing through shipments ahead of the introduction of U.S. tariffs.
“Performance is expected to weaken significantly for the remainder of the year,” SECO added.
The Swiss economic outlook was also downgraded by the KOF Swiss Economic Institute, which cut its forecast for 2026 growth to 1.5% from 1.9% previously.
The “erratic trade policy” of the United States was increasing uncertainty at companies, KOF said, after Washington imposed 10% tariffs on Swiss exports, after an initial 31% import duty was put on hold.
If the higher tariff was imposed, Switzerland could suffer a short recession in 2025, said Alexander Rathke, head of Swiss economic forecasting at KOF.
“Not only would Swiss goods become more expensive in the United States, but they would also be more expensive than those from other countries with lower tariffs,” said Rathke.
“For many products it would not be worth exporting any more,” said Rathke, who gave the higher tariff scenario a ‘very low’ probability.
(Reporting by John Revill)
