Energy crisis acting as drag for Swiss economy
The KOF economic institute has joined other forecasting agencies to lower its predictions for the Swiss economy. However, the experts do not expect a recession for the time being.
The Swiss Institute for Business Cycle Research at the Federal Institute of Technology (ETH) in Zurich is now forecasting growth in gross domestic product (GDP) of 2.3% for the current year and 0.7% for 2023. In its last forecast in June, the institute had still predicted growth of 2.8% for 2022 and 1.3% for 2023.
The KOF is in good company with this downward revision: various institutes have recently lowered their GDP forecasts.
The revision is mainly justified by inflation, which is slowing down the development of purchasing power and making some business models unprofitable. Inflation of 3.0% (previously: 2.6%) is expected for the current year and 2.2% (1.5%) for 2023.
Another explanation for the slowdown is foreign trade, which according to the forecast will weaken significantly next year.
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