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ECONOMY

Swiss economy shows new signs of recovery

The Swiss economy is in good health – despite a dip in the third quarter of this year – and is set for continued growth, according to government economists.

Swiss economy shows new signs of recovery
Consumer spending is set to rise. Photo: Photopress Gaetan Bally.jpg

In a news release on Thursday, the State Secretariat for Economic Affairs (SECO) said there were signs of a “pick-up in growth” after three months of near stagnation.

The global economy is expected to lend momentum to the upturn in Switzerland, and gross domestic product (GDP) will end the year up 1.5 percent.

And SECO forecasts that the economy will grow even faster in 2017 and 2018, by 1.8 percent and 1.9 percent respectively.

Growth will be driven both by domestic demand and by foreign trade.

“The economic outlook thus remains positive, even if the ‘Swiss franc shock’ will likely continue to have some impact on the economy,” the statement said.

SECO also has good news on the job front, saying that unemployment – currently standing at 3.3 percent – will likely fall gradually to 3.2 percent next year and 3.1 percent in 2018.

The recovery on the labour market and a moderate rise in wages will give householders more money in their pockets and should boost consumer spending next year.

Zero inflation is predicted for 2017.

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ECONOMY

Why Switzerland continues to attract foreign companies despite the coronavirus pandemic

Despite the pandemic, 220 foreign businesses set up their offices in Switzerland in 2020.

Why Switzerland continues to attract foreign companies despite the coronavirus pandemic
Switzerland is a magnet for foreign companies. Photo by Valeriano de Domenico/AFP

While this number is 9 percent lower than in the previous year, these companies have created 11 percent more new jobs — a total of 1,168 — than in 2019. Most of the new jobs were created by companies from China, the United States and Germany.

About 3,600 more positions are expected to be offered by these enterprises in the next three years, according to data from SRF, Switzerland’s public broadcaster.

In fact, Switzerland is one of the very few countries that have been able to attract international companies to its shores in 2020, a notoriously bad year for the global economy.

READ MORE: Why Switzerland’s economy is on the up despite the coronavirus pandemic

Experts believe this is due to the country’s strengths, including political, economic and financial conditions.

“Even in a time of crisis, Switzerland scored thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.

There are also other reasons that had prompted foreign companies to come to Switzerland in 2020, despite the economic uncertainty and travel restrictions.

“Protection of legal rights, freedom, and personal responsibility are stronger in Switzerland than in many other countries, even in times of pandemic”, said SGE’s co-president Walter Schönholzer.

Switzerland’s attractiveness is also boosted by studies showing the country’s economy remains the strongest in the world.

Even though the health crisis plunged Switzerland’s economic activity into a “historic” 8.2-percent slump in the second quarter of  2020, the country still boasts the world’s most resilient economy, according to research by an insurance and reinsurance company Swiss Re. 

The International Monetary Fund (IMF) expects a 3.5-percent rebound in Switzerland’s gross domestic product (GDP) in 2021.

It said Switzerland’s economy absorbed the shock of the pandemic better than other European countries and it “has navigated the Covid-19 pandemic well”.

IMF added that Switzerland’s “early, strong, and sustained public health and economic policy response has helped contain the contraction of activity relative to other European countries”.

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