According to KOF: Swiss economy is deteriorating

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Specifically, KOF expects GDP to increase by 0.8 percent this year, economic researchers told the media in Zurich on Wednesday. This means they are back to their spring forecast, which they raised slightly to 0.9 percent in June.

The Swiss economy is currently characterized by two opposing trends: “On the one hand, private consumption and a strong labor market support the domestic economy. “On the other hand, the weakness in the global economy puts pressure on the export-oriented Swiss economy,” he said.

KOF further lowers its expectations for 2024: It now expects growth of 1.9 percent. So far analysts were predicting a 2.1 percent increase. It was stated that the main reason for this revision was the low dynamics of goods exports.

For the first time, KOF also published a forecast for 2025: Then economic growth will probably be 1.6 percent.

Inflation isn’t going to drop anytime soon: The national consumer price index (CPI) is expected to rise 2.2 percent this year and 2.1 percent next year. This means inflation is more persistent than expected: KOF had previously expected inflation to be 1.5 percent next year.

The main reason for revising the forecast for 2024 is that the impact of rent increases on inflation is greater than expected. It was also stated that electricity prices will increase more significantly than previously expected at the beginning of the year. Economic researchers announced that inflation will weaken to only +1.1 percent in 2025.

(SDA)

Source :Blick