Economists predict rapid recovery in Switzerland — if pandemic measures work

Photo by Tim Mossholder on Unsplash
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.

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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