The growing threat of trade wars between the US and China is dampening mid-term economic growth prospects.
The Swiss economy is tipped to grow by 3% by the end of this year, according to the International Monetary Fund (IMF). In April, the organisation had forecast Switzerland’s gross domestic product (GDP) to rise by 2.3%.
Global economic growth has been downgraded from a previous forecast of 3.9% to 3.7% for both 2018 and 2019, the IMF stated on Tuesday. The reason for the less positive sentiment is the continued threat of trade wars involving the United States, the possibility of a no-deal Brexit, slower than expected growth in the European Union and volatility in some emerging economies.
Switzerland bucks the trend thanks to its relative stability and improved trading conditions among companies. Last month, the Swiss government raised its GDP (gross domestic product) forecast for 2018 to 2.9% from 2.4%. The KOF Swiss Economic Institute has also given a more positive estimate in recent days.
But Switzerland’s precarious political relationship with the European Union, plus various global flashpoints involving other countries, has prevented economic forecasters from uncorking the champagne bottles.
The IMF also thinks the Swiss economy may slow down from next year in line with a fall in global GDP growth. On Tuesday it dropped its 2019 forecast from 2% to 1.8%, and estimated growth of 1.7% until 2023.
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