The Swiss economy will suffer its worst decline in several decades this year, as the coronavirus pandemic erodes production and jobs, the Swiss government announced, but also emphasized that the decline will be smaller than expected, amounting to 6.2 percent. This is the largest decline in Swiss GDP since 1975, when the country was hit by the consequences of the oil crisis.
An increase in the unemployment rate to 3.8 percent is also expected, as foreign trade suffers, personal consumption decreases, and companies are just emerging from the measures and suspensions imposed to stop the spread of the covid-19 virus.
The new government forecast is, however, an improvement compared to the GDP decline of 6.7 percent that economists from the Swiss government predicted in April and is more favorable than expectations for other European countries. The OECD, in fact, predicts a decline of 11.5 percent for the United Kingdom, 11.4 for France, and 11.3 percent for Italy.
The Swiss government expects a gradual recovery during the second half of the year, provided that a massive second wave of the disease does not occur, along with serious restrictions. For 2021, it predicts economic growth of 4.9 percent, although unemployment will remain high by Swiss standards, at 4.1 percent.
The Swiss government responded to the crisis with a stimulus package worth more than 60 billion francs, which is close to 10 percent of national GDP, and more than 15 billion Swiss francs for emergency loans has also been distributed to nearly 130,000 companies. About 1.9 million people or 37 percent of the workforce, have requested state aid.
The Swiss lockdown to prevent the spread of covid was milder than in other countries, while the large pharmaceutical sector in the country remains successful.
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