Federal economists expect below-average growth
Published: Wednesday, Dec 13th 2023, 09:30
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The federal government's economists have slightly lowered their forecasts for economic growth next year. It should then gradually normalize.
For the coming year 2024, the federal government's group of experts is now forecasting real gross domestic product (GDP) growth of 1.5%, as announced by the State Secretariat for Economic Affairs (Seco) on Wednesday. In the last forecast in September, they had still assumed 1.6%.
Without the effect of sporting events such as the Olympic Games and major football events, which distort Swiss GDP due to the licensing income of the sports associations based in this country, the forecast is now only +1.1 percent after +1.2 percent. According to the communiqué, this is clearly below-average growth.
The current weak phase is therefore being prolonged. According to the Seco experts, below-average growth of 0.8% is already on the horizon for 2023 (adjusted for sporting events: 1.3%). These forecasts remain unchanged.
Things should improve again in 2025. Adjusted for sporting events, growth of 1.7 percent is predicted. The basis for this is a gradual recovery of the global economy, which should lead to a normalization of growth according to the forecast. However, unadjusted GDP is forecast at a relatively low 1.3%.
Export industry suffers
For the time being, the subdued momentum in the eurozone is likely to slow down the exposed areas of the Swiss export economy in 2024, Seco added. In view of falling capacity utilization and higher financing costs, investments are likely to develop weakly.
Some supportive effects are still expected from private consumption. This is because employment is likely to continue to grow, albeit at a slightly slower rate than previously forecast. Nevertheless, the federal economists still expect the annual average unemployment rate to rise to 2.3% in 2024 from 2.0% in the current year. In 2025, the rate is even expected to reach 2.5%.
Inflation below 2 percent
Federal economists are less concerned about inflation. Specifically, inflation is expected to remain at 1.9 percent for 2024 as a whole and then only 1.1 percent in 2025.
As usual, the risks to the forecast are mentioned. These are pronounced. For example, the geopolitical risks have increased with the armed conflict in the Middle East.
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