ZURICH (Reuters) – The Swiss government significantly cut its economic growth forecasts on Tuesday, citing increasing risks from a “tense energy situation and sharp price increases”.
It now expects the country’s economy to expand 2.0% this year, down from its June forecast for 2.6% growth. [L8N2Y229W]
For 2023 the economy is expected to expand by 1.1%, down from the previous expectation of a 1.9% increase, the State Secretariat for Economic Affair (SECO) said.
The figures are adjusted to remove the effect of sporting events.
“After a positive first half of the year 2022, the Swiss economy now faces a deteriorating outlook,” SECO said. “A tense energy situation and sharp price increases are weighing on economic prospects, especially in Europe.”
SECO increased its inflation forecast, saying it expected consumer prices to rise by 3% in 2022 and 2.3% in 2023. Previously it had expected inflation of 2.5% this year and 1.4% in 2023.
Earlier this month three of Germany’s leading economic institutes lowered their forecast for Europe’s largest economy next year, predicting high energy prices caused by the Ukraine war would take their toll.
Switzerland, which is less dependent on Russian gas and has seen significantly lower inflation than the neighbouring eurozone, traditionally has one of Europe’s more robust economies.
(Reporting by John Revill; Editing by Michael Shields)
