ZURICH (Reuters) – The Swiss economy is expected to grow by 3.6% this year, the government announced on Tuesday and raised its outlook for the full year as the relaxation of coronavirus restrictions increases confidence in the recovery.
The government said it expects the domestic economy to rebound “quickly” while the international situation is also looking better, as it raised its forecast by 3% from its March forecast. [S8N2MD0C0]
The upswing will continue next year, with the Swiss economy expected to grow at an above-average rate of 3.3% in 2022, the government said.
“After the gradual easing at the beginning of March, the domestic economy began to recover rapidly,” said the State Secretariat for Economic Affairs (SECO).
“Industrial production also increased significantly, supported by the strong rise in demand from important trading partners. The indicators point to further growth in both the industrial and service sectors. “
Forward-looking data showed a strengthening of economic activity in the past few weeks, with the purchasing managers’ index reaching its highest ever level in May.
The future-oriented KOF indicator, which shows the development of the economy in six months, also reached its highest level of all time in May.
Switzerland has pushed ahead with easing pandemic-related measures, unveiling plans to limit entry restrictions to the country this month and open up public life further as COVID-19 cases continue to decline.
The government will decide on June 23 whether a fifth wave of reopening measures will take place, including removing the mask requirement in public, increasing seating restrictions in restaurants and reopening discos.
Provided that the planned easing proceeds as planned, the economic recovery is likely to expand over time, SECO announced on Tuesday.
In particular, consumption sectors, which were severely restricted for a long time due to the pandemic, are likely to experience significant catch-up effects, it said.
“This would also increasingly find a way out of the current crisis that has been badly affected, such as accommodation and catering businesses and events,” it continues.
Reporting by John Revill; Adaptation by Brenna Hughes Neghaiwi