Real GDP is projected to increase by 3.2% in 2021 and 2.9% in 2022, supported by the easing of containment measures and stronger sentiment amid the subsiding pandemic. Improving labour market prospects and the progressive reduction of currently high saving will underpin consumption growth. Investment should rebound on the back of reduced uncertainty. With the recovery progressing, deflation pressures will fade, but inflation should remain well within the target range.
The recovery offers an opportunity to improve active labour market policies and reskilling and facilitate resource reallocation to restore productivity growth, notably through lowering internal barriers to competition.
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2021 Structural Reform Priorities
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.