The forecast for 2020 comes from the Center for Economic Studies (KOF) at the Swiss Federal Institute of Technology in Zurich, which uses the so-called KOF Barometer to forecast economic trends.
It bases its findings on 219 indicators, including banking and consumer confidence, production, the exchange rate of the Swiss franc, money supply, interest rate spreads, and stock market prices.
The promising outlook for this year is attributed to a strong manufacturing industry, increase in foreign demand and private consumption, as well as the recovery in the construction sector.
The Organisation for Economic Cooperation and Development (OECD) has also predicted economic growth for Switzerland.
“Private consumption will remain resilient, supported by low unemployment. A gloomy global environment will weigh on investment and trade, but the current account surplus will remain large”, the OECD said.
For its part, the Swiss government predicted a GDP growth of 1.7 percent for 2020, but notes that the country’s export-reliant economy will be affected by the weak growth in the eurozone countries, which are Switzerland’s main trading partners.
“The export sectors, such as the metal and machinery industry, would suffer from sluggish international growth”, the State Secretariat for Economic Affairs (SECO) said.
On the bright side, “certain segments of Swiss industry, specifically chemicals and pharmaceuticals, are currently not very exposed to economic developments abroad”, SECO noted.
Another measure of Switzerland’s healthy economy is an unprecedented boom in the number of businesses established in 2019: 44,482 new companies were created, an increase of 3 percent compared to 2018.
A particularly high number of start-ups were created in the IT, mobility, consultancy, architecture, engineering, transport and logistics, and real estate industries.
However slow EU growth is predicted to harm Switzerland's exports in 2020.