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OECD forecasts drop in Swiss economic growth in 2020

Restrictions imposed to fight the Covid-19 pandemic, such as store closures, will have a major impact on Swiss GDP in 2020, the OECD predicts. Keystone / Laurent Gillieron

Even though restrictions aimed at slowing the spread of Covid-19 were less strict than in other countries, Switzerland will still see its GDP fall by 7.7%, if the pandemic is contained by summer.

Gross domestic product will not rebound until 2021, according to the forecast published by the Organisation for Economic Cooperation and Development on Wednesday.

Despite a shorter lockdown period than other countries, household consumption and investments have collapsed, the Paris-based organisation said. Private spending is expected to fall by 6.8% in 2020 and rebound by nearly as much in 2021.

The OECD predicts exports will bear the brunt of a slow economic recovery and the appreciation of the Swiss franc. It forecasts a drop of 7.6% in exports in 2020 and a rebound of 4.2% next year.

A second wave of the coronavirus, however, could spell even more trouble for the economy, with an increased risk of bankruptcies, job losses and lower investment. In such a scenario, GDP could fall by 10% in 2020 and recover by only 2.3% in 2021, the OECD said.

However, the country’s low level of public debt provides fiscal leverage for authorities to support companies, especially small and medium-sized firms, which have been severely affected by Covid-related closures, it added. Many businesses have been able to re-open their doors beginning in May, after the federal government eased restrictions.

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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.
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