Switzerland’s economy will grow by 2.8% this year, according to government forecasts, which are lower than previously estimated due to the war in Ukraine and higher inflation.
The government, which previously predicted that the economy would grow by 3% in 2022, kept the estimates for 2023, for growth of 2%.
The war in Ukraine “poses great risks to the world economy,” the State Secretariat for Economic Affairs (SECO) said, even if the situation does not escalate further.
SECO raised its inflation forecast for 2022 in Switzerland to 1.9% from 1.1% in December, and said it expected higher prices to hit consumer spending.
Inflation is expected to fall to 0.7% in 2023.
The immediate impact of the conflict in Ukraine on Switzerland is likely to be limited, given the relatively low level of economic ties with Russia and Ukraine, SECO said.
“Nevertheless, significant indirect effects are expected. World prices for key exports from Russia and Ukraine – energy resources as well as certain foods and industrial metals – have risen.
“Inflationary pressures worldwide will therefore remain high for the time being.”
The recent appreciation of the Swiss franc, as investors sought safe havens, is helping to curb inflation, but domestic prices are expected to rise.
Source: Capital
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