Forecast update. Despite better y-o-y growth in the final two quarters the Swiss economy finished 2024 with a weak annual result, the «KOF Surprise Indicator» flags. The new reading of -0.044 (down from -0.041) puts Swiss GDP year-on-year growth estimate at 1.3 percent in 2024, fourth quarter and the annual result at a rather disappointing 0.5 percent, even lower than the previous year.

Nowcast. In direct contradiction to last quarter's early bird songs, the current tune better aligns with dim prospects recorded for Germany and the world economy at large. The final quarter of the past year witnessed a slightly below average GDP expansion which was not enough to boost the annual growth rate above its 2023 result.

Outlook. While the appreciation of the US dollar seems to run out of steam the new US economic policy seems to take shape. New or elevated tariffs on imports from the EU may well also slapped on Swiss goods choking international trade across the Atlantic. EU counter tariffs are likely to do further harm that may not be outweighed by the prospect of peace in Ukraine. Adding to these factors the still ailing economy of Switzerland's most important trading partner, Germany, the current year does not look really promising.