Economic growth is projected to pick up slowly. Export growth, subdued by the strong Swiss franc and a slow recovery in Europe, should rebound and support robust internal demand. Some slack, combined with the strong currency, is delaying the exit from deflation. Employment should keep growing throughout the projection period, driven by activity.
Monetary policy should remain accommodative until deflationary pressures are overcome, but the resulting housing price increases need to be monitored carefully and further macro-prudential measures implemented if necessary. If growth decelerates, Switzerland’s healthy public finances have ample scope for discretionary stimulus. Accelerating the pace of agricultural sector reform would boost longer-term growth and productivity.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.