Coronavirus: Switzerland sees economic resurgence despite fears of second wave

Switzerland's economy appears to be bouncing back from its coronavirus-induced funk but a surge in fresh infections could dramatically slow any recovery.

Coronavirus: Switzerland sees economic resurgence despite fears of second wave
Swiss President Simonetta Sommaruga (L) and Swiss Health Minister Alain Berset walk in front of the Swiss House of Parliament. Photo: FABRICE COFFRINI / AFP

The Swiss Economic Institute (KOF)'s monthly economic barometer rose in September for the fourth consecutive time, jumping 3.6 points to 113.8 points — a 10-year-high, it said in a statement.

The key economic indicator, which had plummeted to unprecedented lows in April and May, has now surged to a level last seen in 2009-10, at the end of the global financial crisis.

“At present, the economy is taking a V-shaped course, so that a recovery of the Swiss economy can be expected for the time being,” KOF said.

The news came after Switzerland last month plunged into a recession after the economic affairs ministry (SECO) said the coronavirus pandemic had caused a “historic” slump in economic activity in the country.

But the central bank last week voiced slightly less pessimism for the full year outlook, now expecting GDP to shrink 5.0 percent in 2020, compared to its previous forecast of 6.0 percent.

KOF meanwhile said the wealthy Alpine nation had seen a clear recent upswing in its hotel and restaurant sectors, which had been devastated by the lockdowns and other measures implemented earlier this year to  rein in the virus.

It also highlighted positive trends in foreign demand, especially in terms of company orders, and said the manufacturing sector and private consumption were also picking up again.

Analysts with Capital Economics hailed the KOF findings, saying they suggested “the Swiss economy gathered momentum going into” the fourth quarter.

Second wave fears

KOF warned however that its rosy outlook could shift if Switzerland, like much of Europe, experiences a big surge in fresh coronavirus cases.

“A second wave of Covid-19 cases could lead to a sharp revision of this assessment,” it said.

To date, Switzerland has seen nearly 1,800 deaths and more than 53,000 cases of the novel coronavirus.

Swiss daily case numbers regularly topped the 1,000 mark in March but stringent measures pushed new daily infections into the low double-digits in June.

Since then however, infections have been steadily rising, with the country currently registering fresh daily case numbers in the hundreds, amid signs of a second wave of the epidemic in much of Europe.

The Capital Economics note remained upbeat however.

“While the second waves of virus cases in parts of Europe are a downside risk for Swiss exporters, the rebound in German manufacturing, and signs that the pick-up in virus cases in Switzerland has already peaked, bode well for the near term,” it said.

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Reader question: Can I put my Swiss health insurance on hold if I’m abroad?

Given how expensive health insurance premiums are in Switzerland, you may be tempted to suspend your policy while you are abroad. Is this possible?

Reader question: Can I put my Swiss health insurance on hold if I'm abroad?

Unlike the obligatory car insurance, which you can suspend temporarily by depositing your registration plates at the local motor vehicles office, rules pertaining to health insurance are much stricter.

As the Federal Office of Public Health explains it, “If you leave the country for a certain period to travel or study but do not take up residence abroad, you are still required to have [health] insurance in Switzerland”.

In other words, as long as you are a registered resident of Switzerland, regardless of your nationality or passport, you must keep your compulsory Swiss health insurance and pay your premiums. While you do this, you also remain covered against most medical emergencies while you travel.

However, rules are less stringent for supplemental health plans which can, in some cases, be put on hold, depending on the insurance provider, according to Switzerland’s Moneyland consumer website.

The only exception allowed for suspending the health insurance coverage is during a military or civil protection service which lasts more than 60 consecutive days.

“During these periods, the risks of illness and accident are covered by military insurance. Your health insurance provider will refund your premiums”, according to FOPH.

Under what circumstances can you cancel your Swiss health insurance?

Swiss law says you can cancel your insurance if you are moving abroad, either permanently for for a period exceeding three months.

If you do so, only claims for treatments given while you still lived in Switzerland will be paid by your insurance; any medical bills for treatment incurred after you officially leave will be denied.

These are the procedures for cancelling your compulsory health insurance if you leave the country under conditions mentioned above

To announce your departure abroad, you must send your insurance carrier a letter including your name, customer number or AVS/AHV number.

You must also include a certificate from your place of residence in Switzerland confirming that you have de-registered from your current address, as well as the date of your departure.

Note, however, that if your new destination is another Swiss community / canton, rather than a foreign country, your insurance can only be cancelled from the following calendar year and only if you present proof of having taken up a new policy with another company.

READ MORE: EXPLAINED: How to register your address in Switzerland

You can find out more information about this process here

If you suspend your health insurance for less than six years, you can reactivate it at a later date with the same company when you return to Switzerland.

READ MORE : What you should know about your Swiss health insurance before you go abroad