Country Economic Forecasts > Switzerland

There have been some green shoots of recovery recently which point to a better start for the Swiss economy in 2016 than we had expected. Exports of goods saw a relatively strong increase in February, while there has been a surprisingly large improvement in the industry PMI, which climbed to 53.2 in March, the highest level since October 2014 and well above the 50 expansion-contraction threshold. But there are still significant areas of concern. Retail sales and tourist overnight stays remained in negative territory in February. And although the latest export data looked encouraging at first sight, they relied heavily on pharmaceutical products, while many other industrial exports continued to struggle. A broad-based export upturn still looks far away given the ongoing impact of the overvalued CHF and sluggish global demand.After the stronger start to the year than we had expected, we have increased our GDP growth forecast for 2016 to 1.0% (up from 0.8% last month). However, the overall outlook remains cautious and we still expect relatively modest growth of 1.6% in 2017.