Swiss economy faces a difficult 2024
Published: Tuesday, Dec 5th 2023, 13:20
Updated At: Tuesday, Dec 5th 2023, 13:20
العودة إلى البث المباشر
The Swiss economy is facing a difficult year in 2024 with below-average growth. This is the opinion of the economists at the Raiffeisen Banking Group. The outlook is particularly poor for traditional industry.
Specifically, the forecast for GDP growth in 2024 is +0.8%, as the bank's experts explained to the media on Tuesday. After a weak 2023, another year of below-average growth is therefore on the cards.
Without the effect of the major sporting events in 2024, things would look even gloomier, according to Raiffeisen chief economist Fredy Hasenmaile. These will provide significant support for GDP in 2024 thanks to the licensing income that will flow to the associations based in Switzerland. Without sporting events such as the Olympic Games and European Football Championships, there would only be growth of around 0.5 percent in 2024, according to Raiffeisen.
Deindustrialization à la USA
Industry in particular is lacking new orders due to the global slump, and more and more companies are running out of order backlogs, according to the report. "We do not expect this to change any time soon," said Hasenmaile.
The strong franc is an additional negative factor for the export industry. "This is causing increasing headaches for many companies in traditional industry," added Raiffeisen economist Alexander Koch. Some have already cut back production or will have to do so soon.
"This increases the likelihood that the deindustrialization of Switzerland will continue," says Koch. This has been going on for years, which is often overlooked due to the flourishing pharmaceutical industry. In reality, however, the share of GDP accounted for by traditional industry is now almost as low as in the USA. "And there, as we know, there are loud complaints about deindustrialization."
According to the Raiffeisen economists, many companies have developed strategies to live with the stronger franc. "But that shouldn't hide the fact that not everyone is succeeding," says Hasenmaile.
Low consumer momentum
Consumption also threatens to put a further damper on the local economy in 2024. Less rosy employment prospects are dampening the appetite for spending. In addition, the purchasing power of many Swiss people will fall in 2024 due to higher health insurance premiums, the likely further increase in rents and, at the same time, only moderately rising wages.
This in turn is positive for inflation. And the worst is definitely over for inflation. Average annual inflation of 1.5 percent is forecast. The effects of rents in particular have so far not had as strong an impact as feared.
The peak of the interest rate cycle has therefore probably been reached, according to the banking group's economists. They now even expect the Swiss National Bank (SNB) to cut interest rates for the first time by the end of 2024. This will then counteract the upward pressure on the Swiss franc and give the export economy and traditional industry, which is currently particularly hard hit, some breathing space.
©كيستون/إسدا
Arabic 
English 
German 
French 
Spanish