GDP shrank by 2.9 percent in 2020, and a return to growth is not expected until the second quarter.
According to initial estimates, the coronavirus crisis brought about the worst economic downturn in Switzerland in 45 years. Due to the measures taken to contain the second wave of pandemics, gross domestic product (GDP) is likely to contract again in the current first quarter.
No crash like 2020
“We will not experience a crash like in 2020, but we will certainly see a sharp decline in GDP in the first quarter,” said Ronald Indergand, economist at the State Secretariat for Economic Affairs (Seco), on Friday to the Reuters news agency. The GDP is likely to decline by 1.5 to 2 percent in the period from January to March.
In the following quarters, economic performance can then be expected to pick up – provided that a third wave of pandemics does not materialize and the easing of the restrictions goes according to plan. Towards the end of the year, the Swiss economy could then return to the pre-crisis level of 2019.
In 2020, the GDP of the Alpine republic shrank by 2.9 percent according to preliminary calculations by the Seco. The slump was thus less severe than feared by government economists in December, but it was still the worst since the 1975 oil crisis.
Second wave braked harder
In the final quarter, the recovery that started in summer practically came to a standstill: quarter-to-quarter growth was still 0.3 percent, after GDP had increased by 7.6 percent from July to September.
In the service sector in particular, the tightened corona measures led to major losses. Overall, the second virus wave slowed the economy significantly less than the first in spring 2020, explained the Seco economists.
A new GDP forecast from Seco is planned for March 11th. In December, economists had assumed three percent growth this year and 3.1 percent in 2022. The Swiss National Bank (SNB) is expecting 2.5 to three percent GDP growth for this year.
