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According to the International Monetary Fund (IMF), Switzerland has economically navigated the Covid-19 pandemic well so far.
In 2020, the Swiss economy shrank by 2.9%, far less than many other advanced European economies. France (-8.2%), Germany (-4.9%), Italy (-8.9%) and the UK (-9.9%) all performed far worse.
According to the IMF, the impact of the pandemic in Switzerland was cushioned by solid public and household finances, competitive export industries, a large well-capitalised financial sector, low dependency on contact-intensive sectors, a well-resourced healthcare system and targeted containment measures.
In addition, swift emergency spending exceeding 10% of GDP, which provided targeted support for households and businesses, was crucial to curbing the economic slowdown, said the IMF.
The IMF recommends Switzerland maintain targeted support and keep monetary policy loose until recovery is secured. It also recommends continuing to keep an eye on real estate price developments and taking early action if needed.
Over the longer term the IMF highlights the need to reform pensions. Here it suggests raising the retirement age and linking it to life expectancy.
The IMF forecasts 3.5% GDP growth in Switzerland in 2021, although it says that high uncertainty and downside risks remain.
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