Switzerland’s economy forecast to recover ‘from summer onwards’

Although earlier forecasts indicated Swiss economy faced a gloomy outlook due to the Covid-19 pandemic, latest figures are more optimistic.

Switzerland’s economy forecast to recover 'from summer onwards'
The forecast for Swiss economy is good. Photo by AFP

In November 2020, Switzerland's Federal Statistical Office indicated a downward trend for 2021. 

But economist Eric Scheidegger predicts a strong boom for this year, even though some sectors of the economy are still suffering the consequences of the health crisis.

“We expect a strong recovery from the summer onwards”, Scheidegger, who is head of the Economic Policy at State Secretariat for Economic Affairs (SECO), told NZZ newspaper on Sunday.

“Switzerland could achieve growth of around 4 percent in both 2021 and 2022”, he added.

Even though Switzerland lost about 72 billion francs during the pandemic, the country still fared better than its neighbours, Scheidegger pointed out.

Swiss economy dwindled 3 percent in 2020, while Germany and Austria shrunk by 6 percent, and France and Italy by 9 percent.

READ MORE: Where are the job vacancies in Switzerland in 2021? 

This optimism is reflected in other studies as well.

A recent one conducted by HSBC Bank shows that “Switzerland’s famously robust economy is weathering a number of challenges”.

Swiss companies “have shown remarkable resilience to face the turmoil caused by Covid-19″, said Jean-Manuel Richier, CEO of HSBC Bank Switzerland

READ MORE: Are companies in Switzerland in good shape to survive impact of pandemic? 

And another study, released in September 2020, found that Switzerland is among the best-placed countries in the world to recover from the coronavirus. pandemic. 

The report noted that Switzerland combines “world class governance with high levels of social capital and high social resilience. They also have strong financial systems, manageable debt levels and good health system resilience”.



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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”.