Swiss lower economic growth forecasts due to war and inflation

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SECO lowered this year’s GDP growth forecast from 2.8% (in March) to 2.6%. © Keystone / Gaetan Bally

The Swiss Secretariat for Economic Affairs (SECO) has downgraded its economic growth forecast for 2022 to 2.6% due to the war in Ukraine and uncertainties in China.

“The Swiss economy made a solid start to the year, but prospects for the international environment have waned,” SECO saidExternal link on Wednesday. “In particular, the global economy is at risk from the war in Ukraine and developments in China.”

“The war in Ukraine could have a more severe impact than previously expected,” it added.

SECO lowered this year’s GDP growth forecast from 2.8% (in March) to 2.6%. This was also partly due to rising prices for food and energy, it said.

It also cut its forecast for GDP growth in 2023 to 1.9% from the 2.0% rate it previously expected.

“The outlook for the international economy has deteriorated. World market prices have risen sharply for key Russian and Ukrainian exports, such as energy resources and certain food staples and animal feeds,” said SECO.

The resulting inflationary pressure is curbing demand in major trading partners, with adverse effects on exposed sectors of the Swiss economy.

“At the same time, China’s drastic pandemic containment measures are likely to weigh heavily on its economy,” it added.

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