After decelerating during 2019, economic growth is projected to pick up in 2020-21. Private consumption will remain resilient, supported by low unemployment. A gloomy global environment will weigh on investment and trade, but the current account surplus will remain large. nternational sporting events will boost service exports and thus growth in 2020. Inflation will be subdued following the recent currency appreciation but inch up in 2021.
The priority is to revive labour productivity to maintain high living standards. There is room to improve skills and labour market outcomes of workers from poorer socio-economic backgrounds (especially migrants) and encourage their participation in continuing education and training. Helping women to work full-time will reduce skills shortages. Reforming public support to agriculture will boost its productivity and reduce its environmental impact.
Switzerland’s living standards remain high. Its population is healthier than in many countries and is well educated. This contributes to high employment rates and narrow wage differentials. As a small open economy, Switzerland has benefited from the flow of ideas, people and capital. It boasts world-class industries and attracts international talent. Zurich and Geneva routinely rank among the world’s most liveable cities. The challenge is therefore to sustain these achievements.