Economic Forecast: Outlook Deteriorates Marginally Amid High Uncertainty
Bern, December 17, 2024 – The outlook for the Swiss economy has deteriorated slightly amid heightened uncertainty, according to the latest economic forecast from the Swiss Federal Department of Economic Affairs, Education and Research (EAER). The EAER expects economic growth to moderate to 1.0% in 2023, down from the previous forecast of 1.2%.
The downward revision is primarily due to the ongoing energy crisis, rising inflation, and slowing global economic growth. The energy crisis has pushed up production costs for businesses and reduced consumer spending. Rising inflation has eroded household purchasing power and undermined business profits. Slowing global economic growth has reduced demand for Swiss exports.
Key Points of the Economic Forecast:
- Economic growth is expected to moderate to 1.0% in 2023, down from the previous forecast of 1.2%.
- Inflation is projected to remain elevated in 2023, averaging 2.4%.
- The unemployment rate is expected to rise slightly to 2.2% in 2023.
- The Swiss National Bank (SNB) is expected to continue raising interest rates to combat inflation.
- Risks to the economic outlook remain high, including the ongoing energy crisis, geopolitical tensions, and the trajectory of the global economy.
High Uncertainty
The EAER emphasizes that the economic outlook is subject to high uncertainty. The energy crisis and the war in Ukraine continue to pose significant risks to the global economy. The SNB’s monetary policy tightening could also dampen economic growth.
Despite the challenges, the Swiss economy is expected to remain resilient. The strong labor market and a healthy financial sector provide some degree of insulation against external shocks.
Policy Implications
The EAER urges the government to continue monitoring the economic situation closely and to implement measures to mitigate the impact of external risks. The government should also focus on promoting economic growth and job creation.
The SNB is expected to continue raising interest rates to combat inflation. However, the SNB is likely to proceed cautiously to avoid undermining economic growth.
Conclusion
The Swiss economic outlook has deteriorated slightly amid heightened uncertainty. The energy crisis, rising inflation, and slowing global economic growth are posing significant challenges. However, the Swiss economy remains resilient, and the government and the SNB are taking measures to mitigate risks and promote economic growth. The economic outlook remains subject to high uncertainty, and the situation will continue to be monitored closely.
Economic forecast: Outlook deteriorates marginally amid high uncertainty
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