Swiss economy avoids recession only thanks to immigration

Switzerland lives up to its reputation as an island once again: the local economy continues to grow as the world goes into recession, according to a study by the Zürcher Kantonalbank (ZKB). At a snail’s pace, but still: On Tuesday, the State Secretariat of Economic Affairs (Seco) reported a small growth in gross domestic product (GDP) of 0.5 percent year-on-year in the third quarter.

In a new forecast, ZKB economists now expect GDP growth to be 1 percent for the next year. This is weak. But it’s still better than the eurozone, where observers expect a recession next year.

Thanks to the Germans and their partners!

However, those who want to attribute the better performance of the Swiss economy to the talented Swiss people are far from this: the ZKB analysis concludes that the Swiss economy will only continue to grow in the coming year, thanks to immigration!

We owe the Germans, the French, the Italians and their partners, in particular, that we did not enter a recession. Immigration was extraordinarily low during the pandemic. This year, however, net migration will likely be higher than in years, and there are no signs of a reversal of the trend for 2023.

“Thanks to immigration, there are more people with us, and that means they are being consumed more overall,” explains David Marmet, chief economist at ZKB. “They need infrastructure, housing, schools. This will help us avoid a recession.”

Unemployment is rising slightly

Struggling with a shortage of skilled workers, the economy is happy with every additional worker. For example, we can hear from ski regions that more seasonal workers have started to work this winter.

However, the slowdown in the global economy did not affect Switzerland either. ZKB talks about “manageable skid marks”. Unemployment in Switzerland is likely to rise to 2.5 percent next year – from the current record low of 1.9 percent, according to the ZKB forecast.