Switzerland facing biggest economic slump since 1975

In a revised forecast in the wake of the coronavirus pandemic, federal authorities predict GDP will contract by 6.7% in 2020 and recover slowly in 2021.

On Thursday, the State Secretariat for Economic Affairs (SECO) announced that it had adjusted 2020 economic forecasts to take into account sporting events affected by the pandemic. The original revised forecast estimated the economy would contract by 1.5%. Unemployment is expected to average 3.9% over the year.

In a press release, SECO warned that this would make it the biggest slump in economic activity since 1975.

This is a more dire prediction than that of the BAK Economics Institute, a Basel-based think tank, which at the end of March predicted a drop in GDP of 2.5% in 2020.

The forecast expects a modest recovery with the easing of restrictions in the next few months. However, income losses due to high rates of partial and full unemployment as well as the considerable economic uncertainty “will limit the amount of lost ground that private consumption will be able to make up in the second half of the year”, according to the economic ministry.

Read more via Swissinfo/SECO/ BAK