That’s after an earlier expectation of a 2.5 percent increase. But the negative effects of Russia’s war in Ukraine will then be felt primarily in the coming year.
For the coming year, the OECD forecasts economic growth to decline to 0.6 percent after rising 1.4 percent so far. GDP growth will reach 1.4 percent in 2024.
According to the OECD, the war in Ukraine negatively affects the global economy and also hinders Swiss exports and domestic demand. Still, consumers in Switzerland are likely to gradually reduce their very high savings rates. According to the OECD, this will support private consumption over the next two years.
The OECD cites potential disruptions in industrial production, triggered by natural gas or electricity bottlenecks, as the biggest risks to the economy.
Rising energy prices will also keep inflation well above the Swiss National Bank’s (SNB) target range. While the OECD expects inflation to be 2.9 percent in the current year, it is expected to decline only slightly to 2.5 percent next year.
The OECD states that the SNB will therefore have to tighten its monetary policy further. According to OECD forecasts, inflation will not fall into the 1.5 percent range defined by the SNB as price stability until 2024.
The organization also calls for further reforms. Fiscal consolidation should continue, while targeted measures to tackle the refugee flow are appropriate.
The OECD also sees the need for structural reforms in ecological sustainability and energy security, as well as removing barriers to the labor market and competition.
(SDA)