Economists predict rapid recovery in Switzerland — if pandemic measures work

The hardest hit areas of Swiss economy, such as the tourism and export sectors, are expected to rebound this year – on the basis of one important condition.

Economists predict rapid recovery in Switzerland — if pandemic measures work
Photo by Tim Mossholder on Unsplash

Switzerland’s economy will “recover quickly” with the easing of coronavirus restrictions and vaccinations, the State Secretariat for Economic Affairs (SECO) said on Thursday. 

“This forecast is based on the expectation that the planned easing of measures from spring 2021 onwards will largely be implemented as intended, and that any tightening of virus containment measures involving significant economic impacts will no longer be necessary”, SECO noted.

The group still expects Switzerland’s GDP to decline sharply n the period between January and March 2021. “However, we should not witness a decline of the same magnitude as that which occurred last spring.”

“Particularly vulnerable areas of the economy, such as international tourism, should also gradually find their way out of the current crisis”, SECO added.

Its group of experts predicts an above-average growth in GDP of 3.3 percent, adjusted for sporting events . Global economy has also improved since the December 2020  forecast (3.1percent ), “which will also benefit the Swiss export sector”.

“Employment too is expected to rise considerably as the economy recovers, and unemployment is set to fall to an annual average of 3 percent”.

However, SECO noted that if mutated viruses weaken the effectiveness of existing vaccines, the economy might not recover until 2022.  

The recovery would be also be delayed if further restrictions “were to be introduced domestically and by key trade partners, for example due to backlogs in the coronavirus vaccination programmes”, SECO noted.

Another recent study found that the Swiss economic outlook is more positive than previously predicted, despite the pandemic. 

“The downward trend since the interim high during the pandemic in September 2020 has come to an end, at least for the time being. For the next few months, the economic barometer signals a somewhat more lively economic activity”, according to the Swiss Economic Institute.

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

However, unemployment remains high.

Recent figures show that the pandemic-related economic slump has significantly increased the number of job seekers in Switzerland, especially in restaurant and hotel sector, as well as construction and manufacturing and service industry. 

The loss of jobs in these and other sectors have caused “an unprecedented crisis” in Switzerland’s labour market, economists said.

READ MORE: ‘Unprecedented crisis’: New figures show stark impact of pandemic on all Swiss job sectors

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Jobs: Why Zurich has rebounded better than other Swiss cities from Covid

The Covid pandemic hit Switzerland hard, although the country's largest city has rebounded strongly.

Jobs: Why Zurich has rebounded better than other Swiss cities from Covid

Measures imposed due to the Covid pandemic, which began in earnest in February 2020, shuttered businesses across the country and pushed many people out of work. 

When most notable Covid rules were relaxed in Switzerland in mid-February 2022, the economic recovery – highlighted by a strong job market – began in earnest in 2021. 

READ MORE: How the Swiss job market rebounded from the Covid pandemic

Nowhere was this more evident than Zurich, Switzerland’s largest and most economically powerful city. 

How did Zurich rebound from the Covid pandemic in comparison to the rest of the country?

Even though Zurich, along with other large Swiss cities like Geneva, Basel, Bern and Lausanne, have been hit hard by the pandemic from the employment perspective, Zurich’s labour market is now growing faster than in other urban centres.

One of the reasons for this upward trend is that young, well-educated foreigners are coming back.

In the first nine months of 2021, the city’s population grew significantly.

In September alone, it recorded 2,200 additional residents.

This is mainly due to people with a B residence permit, according to Klemens Rosin, methodologist at Zurich’s Statistics Office.

During the crisis, far fewer of them left the city. “This group is made up of well-educated, younger and mobile foreigners who have made a significant contribution to Zurich’s growth”, Rosin said.

Zurich’s employment market is expect to grow even further.

READ MORE: How hard is finding work in Zurich without speaking German?

That’s because in the coming years, many Zurich workers will retire — an estimated  210,000 by year 2050 — creating more job opportunities for younger employees.

In fact, according to a study commissioned by the canton in 2021, if Zurich’s economy is to continue to flourish, it will need around 1.37 million workers by mid-century.

If these vacancies will not be filled, then income, tax revenue and the financing of social security programs will be impacted.

READ MORE: Have your say: What’s the best way to find a job in Zurich

While it is difficult to predict what jobs will be most in demand in 2050 — what new technologies will emerge in the meantime — right now and in medium term, IT workers will be especially needed, experts say, because businesses will continue to to digitalise and automate.

Lower skilled jobs will also be in higher demand, including hospitality, retail and transport. 

With hundreds of thousands of vacancies to fill, people with the permission to work in Switzerland are likely to be flush with offers – particularly skilled workers with recognised qualifications. 

READ MORE: Why finding a job in Switzerland is set to become easier