GDP forecast based on semantic business cycle identification

Release 2021-05-14
    Figure 1: Business cycle indicator and Swiss GDP with forecast  


Forecast update. The latest reading of the «KOF Surprise Indicator» of -0.056 in 2021, first quarter suggests that Switzerland slowly but steadily claws its way back to normality from Corona exceptionalism. Despite a minor drop of the indicator value from -0.047 (revised) GDP y-o-y growth remains steady at 0.57 percent (2020 q4: 0.82).
«home   Table: Swiss real gross domestic product with forecast  

Year-to-year growth (%) of Swiss real gross domestic product (GDP)
fitted / forecast
standard error
seco estimates*

Sources: Own calculations, forecast for 2021(1), fitted values otherwise, *seco releases (left: Dec 1, 2020, right: Feb 26, 2021).

Sample: 2000 (2) - 2020 (4), Forecast: 2021 (1), SECO data

Note: Forecast obtained by best nowcasting model.

Nowcast. The first quarter of the year saw a slight setback of Swiss business cycle in a year-on-year perspective compared to the previous quarter. Apparently, last year's drop in value added in the first quarter did not provide enough thrust for this year's recovery from the worst effects of the pandemic to lift economic growth above 0.6 percent.
The new indicator value of -0.056 implies a somewhat lower gear for the Swiss economy than before when it amounted to roughly -0.047 in two previous quarters.
    Outlook. While Swiss death rates due to Corona compare rather badly to by developed countrys' standards, infections rates have recently dropped impressively providing the government with strong arguments for giving back to the economy some breathing space.  
    Accordingly, expectations for a strong revovery rise by the hour and without further severe negative shocks only ill-advised econommic policy such as monetary or fiscal tightening may stand in the way of the stronger growth.  
Previous update
Standard error of regression*
Business cycle data download
History 2020-11-13 release
  2020-08-20 release
  2020-05-14 release
  2020-02-19 release
  Complete release history
  First release
Next release 2021-08-19
    *Standard error of regression refers to baseline model published in the first release.  

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