Compared to its autumn forecast, KOF has changed its overall economic picture very little and hardly revised its forecast. The risk of energy shortages and the associated economic downturn has plummeted since the fall, according to a statement on Thursday.
In its most recent forecast, KOF expects real gross domestic product (GDP) to decline to 0.7 percent in 2023 after growing 2.0 percent this year. Significantly higher growth of 2.1 percent is only then projected for 2024. Both values were not revised from the final estimate.
Without the impact of major sporting events known to affect local GDP, expected growth rates are given as 1.0 percent (2023) and 1.7 percent (2024).
The lowest point in the economic trend will likely be in the current winter six months. According to KOF, a decline in overall economic output is expected in some countries this winter or in the first half of 2023. The Swiss economy will not be able to get rid of it completely. Although it can prevent a recession thanks to its relatively high level of endurance, the level of production is likely to stagnate.
As it is known, inflation in Switzerland has recently decreased slightly due to the decrease in oil prices. It’s around 3 percent, according to KOF, well below the inflation rate in other European countries, but well above the Swiss National Bank’s (SNB) inflation target.
Raising regulated energy prices in the first quarter of 2023 will lead to further inflationary pressure. The cessation of base effects will lead to lower inflation throughout 2023. KOF expects annual inflation to rise from 2.9 percent in 2022 to 2.3 percent in 2023 and 1.1 percent in 2024. Values for 2023 and 2024 are slightly higher than the autumn forecast.
(SDA)