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Swiss GDP: Marching south |
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Release 2024-05-16 |
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Figure: Business cycle indicator and Swiss GDP with forecast |
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Forecast update. The annual growth rate of Swiss GDP turns more negative in 2024, first quarter, the
«KOF Surprise Indicator» says. Its recent recovery proved short-lived sliding down to -0.051 (down from -0.041, revised)
implying Swiss GDP shrinks by -0.25 percent in 2024, first quarter. Owed to global concerns about wars in Europe and the Middle East as well as overly tight fiscal policy, positive impulses
are lacking. The outlook for the next quarters thus remain subdued and even a recession is now in the cards. |
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Table:
Swiss real gross domestic product with
forecast |
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Date |
Year-to-year growth (%) of
Swiss real gross domestic product (GDP) |
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fitted / forecast |
standard error |
seco estimates* |
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2023(3) |
0.72 |
- |
0.25 |
0.38 |
| 2023(4) |
-0.66 |
- |
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0.56 |
| 2024(1) |
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0.78 |
- |
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Sources: Own calculations, forecast
for 2024(1), fitted values otherwise, *seco releases (left: December 1, 2023, right: February 29, 2024).
Sample: 2000 (2) - 2023 (4), Forecast: 2024 (1), SECO data
Note: Forecast obtained by best nowcasting model.
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Nowcast.
Lackluster public finances and two wars that have been dragging on for way too long take their predicted toll on Swiss value added.
With year-on-year GDP growth negative for the second quarter in a row, the likelihood of a full-blown recession is on the rise according to the
«KOF Surprise Indicator». |
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Outlook.
Fiscal and monetary policy still seem to ignore the immanent risks of recession while positive impulses from abroad are not in sight either. Quite to the contrary,
debt brake rules and largely irrational fears of inflation witness the economy sleepwalking further towards the brink of recession. |
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Without decisive and timely action more negative figures will surface in the coming months. Eventually, unemployment may raise its ugly head again and we all must keep our
fingers crossed that faltering businesses and real estate speculations will not trigger yet another financial crisis. |
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*Standard error of regression refers
to baseline model published in the first release. |
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Quarterly
nowcast update. Order your free personal quarterly email
alert with the latest GDP estimate based on the «KOF surprise
indicator». Subscribe here»
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