Global Economic Outlook – September 2022 Switzerland: Resilient, but not immune to shocks The Swiss economy Accommodative fiscal and Strength of Swiss Franc exhibits robust growth, monetary policies should further increased by a first-mover recovering from a lower support growth, although some rate hike of SNB in June – Covid-induced output gap offset from the war in Ukraine no substantial risk to growth than its European peers. should be expected. despite softening exports. The Swiss economy is currently performing well, especially Table 15: KPMG forecasts for Switzerland compared to its European peers. Cumulative GDP growth 2021 2022 2023 over 2020-2021 was 1.6% (Germany: -1.6%). This was due to agile, supportive policies and the general global upswing. GDP 4.2 2.5 1. 2 Employment has already surpassed pre-crisis levels, with Inflation 0.5 2.9 1. 8 key factors including ongoing strong pandemic support and accommodative monetary policies. Especially strong Unemployment rate 5.1 4.3 4.2 export dynamics (watches, instruments, pharmaceuticals), Source: Eurostat, SECO, KPMG forecasts. combined with low levels of non-performing loans, have Note: Average % change on previous calendar year except for unemployment rate, also supported growth. which is average annual rate. Inflation measure used is the HICP. The economy continued to grow by a robust 0.3% in both Q1 and Q2 2022. The value added to the service sector increased significantly as the Covid restrictions were lifted at the beginning of April. Within the service industry, accommodation and food services was the fastest-growing sub-sector with growth of 12.4% from the previous quarter. In contrast to the positive growth impulses, exports of goods fell sharply by 11.5% in Q2, due to a significant contraction in transit trade. A further slowdown in economic growth is expected, with overall 2022 growth rate still robust, but dampened by spillovers from the war in Ukraine. Although direct exposure to the war (exports to impacted markets, financial sector, investment) appears limited, indirect effects (higher energy and commodity prices, supply disruptions, and lower regional and global growth) could be substantial. Fiscal and monetary policies remain supportive (despite a surprising Swiss National Bank (SNB) rate hike in June), and higher household savings during Covid should support private consumption as a stabilizer of growth. We expect GDP growth of 2.5% in 2022. © 2022 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 43