Swiss economy rebounds to near pre-pandemic levels

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The Swiss economy grew by 1.8% in the second quarter versus the first three months of 2020 as easing COVID-19 restrictions helped reverse two consecutive quarters of declines, official data showed on Thursday.

Loosening curbs boosted private consumption and services like catering and domestic tourism.

“In the second quarter, total GDP was only 0.5% lower than the pre-crisis level seen in the fourth quarter of 2019,” the State Secretariat for Economic Affairs (SECO) said.

Overall, GDP rose 7.7% year-on-year from April through June.

That fell short of economists’ expectations for 9.0% growth in a Reuters poll, while quarterly growth also missed estimates for 2.0%.

The Swiss government raised its economic growth forecast in June, as easing coronavirus restrictions helped boost confidence in the recovery and hopes GDP could surpass pre-crisis levels sooner. It saw 3.6% growth this year.

However, Switzerland has been hit by a “very worrying” fourth wave of COVID-19, and the finance ministry has cautioned further waves of the virus could yet pose significant risks to the public purse and overall recovery.

The government has thus far held off on introducing further restrictions despite rising case numbers.

The economy had contracted by 0.4% in the first quarter of 2021 on a revised basis and by 2.4% in 2020.

SECO said service sectors that had been most affected by restrictions added the most value in the second quarter, with accommodation and food services up 48.9% and arts, entertainment and recreation up 52.9%, albeit both remaining below pre-crisis levels.

Manufacturing and the export of goods also had marked increases, albeit at lower rates than the pronounced pickups in the first months of the year.

Inflation has been picking up in Switzerland, with consumer prices rising 0.9% year-on-year in August and 0.2% compared with the month before.

The Swiss National Bank is set to hold its next policy meeting on Sept. 23, deciding whether to keep its ultra-low interest rates.

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