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Switzerland GDP Q4 2020: +0.3 percent QoQ, -1.6 percent YoY

Switzerland’s GDP growth slowed to 0.3 % in the 4th quarter after reaching 7.6 % in the 3rd quarter.  Major losses were recorded in the services directly affected by the tightening of the containment measures. Other industries continued to recover. On the whole, the second wave of the coronavirus until the end of 2020 had much less of an impact on the economy than the first wave did last spring.

Switzerland Gross Domestic Product (GDP) QoQ, Q4 2020

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Switzerland Gross Domestic Product (GDP) QoQ, Q4 2020

Source: investing.com - Click to enlarge

Economic recovery was interrupted in certain sectors during the 4th quarter. In Switzerland, capacity restrictions and business closures were ordered to contain the coronavirus. Interna-tional travel also declined sharply, which was detrimental to tourism. Value added in accom-modation and food services(–20.8%),as well as in arts, entertainment and recreation(–7.7%),fell considerably after the temporary easing of restrictions during the summer months. This was also true in transport and communications(–0.5%),where the decrease in value added reflected the reduction in mobility among the Swiss public. Finally, a decline was reported in healthcare and social work(–0.7%).The decreases in these sectors are therefore far less severe than those experienced in spring 2020. Nonetheless, the economy is still feeling the impact of the second wave of the coronavirus and the measures implemented to contain it in the 1st quarter of 2021.

Switzerland Gross Domestic Product (GDP) YoY, Q4 2020

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Switzerland Gross Domestic Product (GDP) YoY, Q4 2020

Source: investing.com - Click to enlarge

Private consumptioncontracted considerably (–1.5%)in the 4thquarter.While spending on hospitality and leisure services slumped, expenditure on food and other goods such as elec-tronics rose. All in all, private consumption fell less sharply than it did during the 1st quarter at the start of the pandemic, despite the second wave of the coronavirus. As such, trade (+1.5%)posted a positive result for the quarter. Financial services(+0.7%)and business-related services(+0.4%)also grew. On the whole, then, the service sector only experienced a slight downturn in terms of value added.

In construction(+0.4%),value added picked up in line with investment in construction(+0.1%).Investment in equipment (+1.9%)continued to recover and also contributed to the stabilisation of the domestic economy. Many companies increased their investments again after postponing them last spring. Government consumption(+2.3%)stepped up markedly due to additional, coronavirus-related spending. Overall,final domestic demand(–0.2%)de-clined only slightly in the 4th quarter, which was reflected in a slight decrease in imports2(–0.6%).

Quarter on Quarter Growth Rates ESVG, Q4 2020

Quarter on Quarter Growth Rates ESVG, Q4 2020

- Click to enlarge

In contrast to the first half of 2020, international supply chains experienced very little interrup-tion in the 4th quarter. Manufacturing(+1.4%)enjoyed renewed growth buoyed by the strong resurgent demand in major economies in Asia. Various export categories, including watchmak-ing and precision instruments, as well as machinery and metals, continued to recover from the slump in spring 2020. While exports of goods3(–1.0%) declinedoverall, this was solely due to a negative development in merchanting. Exports of services(+0.4%) reportedslight pos-itive growth.

Initial results for 2020

According to the available provisional results,real GDPshrank by 2.9%in2020, much more severely than at the time of the financial crisis in 2009 (−2.1%). An even sharper decline was recorded in 1975, in the wake of the oil crisis.

The service sector was hit particularly hard by the crisis, and private consumption fell to a degree never seen before. Conversely, the contractions of manufacturing and exports were less pronounced than they were during the financial crisis.

Year on Year Growth Rates ESVG

Year on Year Growth Rates ESVG

- Click to enlarge

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Swiss Statistics
The Swiss Federal Statistics Office publishes information on the situation and developments in Switzerland in a multitude of fields and plays a part in enabling comparisons at an internal level.
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