Economist Roxane Spitznagel’s predictions: Will everything be more expensive in 2024?

What do you foresee for the Swiss economy in 2024?
We expect sports-adjusted gross domestic product to grow by 1.3 percent in 2024. If major sporting events, which will be next year’s Olympic Games in Paris and the European Football Championship in Germany, are included, the Swiss economy will grow by 1.7 percent.

The German economy is weakening. What implications does this have for Switzerland?
Germany is Switzerland’s most important trading partner. For example, the weakness of German car manufacturers directly affects Swiss car suppliers. Links are also close in other industrial sectors. However, Switzerland remains relatively resilient thanks to its strong domestic economy.

Why does Switzerland fare well compared to other European countries?
Switzerland has several location advantages over many EU countries. It exudes political and financial stability, has a stable and diverse economy, and has a very well-educated workforce due to its attractiveness as a country of immigration. This makes Swiss companies extraordinarily innovative. Economically, Switzerland has weathered the corona and inflation crisis better than almost all EU countries. In the latter, Switzerland benefited above all from the strong franc exchange rate, as imported inflation was kept largely low.

Should politicians make the debt brake a little more flexible to create more room for investment?
On the one hand, a flexible debt brake could allow the government to stimulate demand or make long-term investments during an economic crisis. But a lax approach to the debt brake could also lead to financial risks and instability. The debt brake has proven itself in its current form. Switzerland is significantly less indebted than neighboring countries such as Germany, France, Italy and Austria.

How is inflation going?
We expect inflation to decrease to 1.7 percent in 2024. This would allow inflation to return to the Swiss National Bank’s (SNB) target range.

Apart from rising rents, rising premiums and rising energy prices: what else will burden us in 2024?
In 2024, we will continue to face geopolitical risks due to wars in Ukraine and the Middle East. Escalation of the war in the Middle East to other countries could weaken global trade and trigger increases in raw material or energy prices, which could significantly slow down the global economy. An economic risk may also arise if the conflict between China and Taiwan escalates. As for the domestic economy, structural problems such as demographic change will worsen over the next few years. More and more baby boomers will leave the labor market over the next few years, further exacerbating the skilled worker shortage.

Did the Swiss economy really escape the CS collapse unscathed, as politicians claim?
The Swiss economy survived the CS bankruptcy well. The takeover of CS by UBS created a domino effect and thus averted a banking crisis. The positive development in UBS’s share price is the first indication that the takeover of CS has generally worked out well, even if a piece of Swiss banking history has disappeared.

What consequences would the election of Donald Trump have for the Swiss economy?
As a small, open economy, Switzerland relies on trade with other countries, and the United States is Switzerland’s most important trading partner after Germany. In addition, the USA is the economic locomotive of the world. The election of a protectionist politician like Donald Trump could affect global trade and thus the Swiss economy.