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With Swiss Life and Economiesuisse, other institutes are lowering their economic forecasts for Switzerland. The main reason is the economic slowdown in Europe.

Economists at Swiss Life expect GDP growth of only 2.2% for 2022 and 0.9% for 2023. A month ago, the forecasts were still at +2.5 and +1.1%.

Even experts at EconomySwiss are more skeptical. While they leave their forecast below the average for 2022 at 1.8 percent, they are lowering their forecast for 2023 to 0.5 percent from 1.6 percent.

The export economy feels the weakness of the Eurozone

Economists at insurance group Swiss Life justify their change in forecasts on Thursday that Switzerland cannot fully escape the economic headwinds sweeping Europe. The export economy will see a “significant decrease in incoming orders”. The starting position for tourism is also difficult with regard to the winter season.

In addition, construction spending has stagnated since the beginning of the year and, given higher financing costs, is likely to contribute negatively to GDP growth in the coming quarters. Consumers are exposed to a loss of purchasing power due to inflation and are “too reluctant” to buy new consumer durables.

After all, it is possible that peak inflation will soon be passed, experts say. Specifically, Swiss Life expects an inflation rate of 2.9% for 2022 and 2.1% for 2023.

Only a negative quarter

All this will mean that the Swiss economy will shrink slightly in the first quarter of 2023, according to insurance group economists. However, a recession is still not expected in the truest sense – with two downward quarters in a row.

But a prerequisite for this is the flow of electricity and gas at all times during the winter months. “In the unfavorable case of severe shortages, recession will also be inevitable for Switzerland,” the report reads.