Swiss economic recovery continues despite war, global slowdown

The Swiss economy responded well to the end of Covid restrictions in March, expanding 0.3% in the second quarter, Bloomberg reports.

The government’s decision to lift all remaining coronavirus curbs had a positive impact on growth in the hospitality, transport and events sectors in the period, according to government data published Monday.

The increase in gross domestic product — in line with economist estimates — also benefited from a strong consumer spending.

The Swiss manufacturing sector failed to sustain its high growth rates due to persistent supply shortages and a slowing global economy, falling for the first time in seven quarters.

In June, the Swiss government projected that GDP would rise by 2.6% in 2022. But the forecast warned that the economy remains vulnerable to supply chain bottlenecks, higher prices and increased uncertainty stemming from Russia’s war with Ukraine.

Swiss inflation is far below that in the rest of Europe, reaching 3.3% in August compared with 9.1% in the surrounding euro area.

Swiss National Bank President Thomas Jordan recently warned that price pressures have become more broad based and higher inflation may persist for years to come. SNB policy makers hiked interest rates by a half point in June and may do so again when they meet this month.