Previous post Next post

Switzerland faces recession in 2020 due to pandemic, experts warn

Switzerland has imposed major restrictions on public life in a bid to contain the coronavirus pandemic.  (Keystone)

Switzerland is headed towards a severe recession this year due to the economic fallout of the coronavirus, experts warn. If the pandemic is brought under control, the Swiss economy should rebound strongly in 2021.

The BAK Economics Institute, a Basel-based think tank, says the collapse of private spending will trigger a global recession. For Switzerland, this means reduced service exports due to a drop in demand for tourism and events.

On Monday, the think tank predicted a fall in gross domestic product of 2.5% in 2020. That contrasts with its previous forecast which estimated a growth of 1.3% for this year. In an optimistic scenario where the health crisis is quickly under control, the economy should rebound strongly by 4.3% in 2021.

Reduced economic growth will also likely take a toll on employment. The unemployment rate in Switzerland is expected to rise by 0.8 percentage points to 3.1% in 2020, before declining again to 2.7% in 2021.

Negative scenario

In a separate forecast, specialists from the UBS bank said they expect a GDP drop of 1.3% this year followed by a rebound of 2% in 2021, provided emergency measures are abandoned at the end of April. If the crisis continues beyond then, GDP growth could fall by 3% in 2020, they warned.

In this negative scenario, the unemployment rate would increase and weigh on household spending. A wave of corporate bankruptcies would mean defaults on loans from banks. The latter would reduce the volume of mortgages, which would penalize the construction sector. In this case, an economic rebound would not occur before 2022.

Full story here Are you the author?
About Swissinfo
SWI – the international service of the Swiss Broadcasting Corporation (SBC). Since 1999, has fulfilled the federal government’s mandate to distribute information about Switzerland internationally, supplementing the online offerings of the radio and television stations of the SBC. Today, the international service is directed above all at an international audience interested in Switzerland, as well as at Swiss citizens living abroad.
Previous post See more for 3.) Swissinfo Business and Economy Next post
Tags: ,

Permanent link to this article:

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.