Switzerland’s economy will suffer its worst downturn in decades during 2020 as the coronavirus pandemic damages output and jobs, the government said on Wednesday, but the downturn will be less severe than initially feared.
Swiss gross domestic product will fall 6.2% this year, the State Secretariat for Economic Affairs (SECO) said, the worst downturn since 1975, when the country was hit by the aftermath of the oil price shocks.
Another flareup of the outbreak “would slow the recovery and increase the probability of more serious second-round economic effects such as large waves of lay-offs and bankruptcies,” the SECO said.
Unemployment is forecast to rise to 3.8% this year, as foreign trade suffers, consumer spending shrinks and companies emerge slowly from shutdowns imposed to halt the spread of the COVID-19 virus.
Still, the forecast was a slight improvement from the 6.7% downturn in GDP foreseen by the Swiss government’s economists in their April statement, and compares favourably with other European countries.
The Organisation for Economic Co-operation and (OECD) says Britain could suffer an 11.5% slump this year. Downturns of 11.4% are expected in France and 11.3% in Italy.
The Swiss government expects a gradual recovery during the second half of 2020, provided a massive second wave of the disease along with severe restrictions does not occur.
Reuters / Bloomberg
