Swiss economic forecast: why 1.7 percent is not yet an all-clear
The federal forecast raises growth for 2026 markedly. The strong quarterly figure depends heavily on chemicals and pharmaceuticals and on exports – the risks remain considerable.
The Swiss economic forecast for 2026 comes out markedly better than in June. The federal government's expert group now expects sporting-event-adjusted gross domestic product to grow by 1.7 percent instead of 0.9 percent. That is a sharp revision. It does not, however, mean that all parts of the economy are recovering to the same extent, or that the risks are off the table. The higher annual figure is partly due to an exceptionally strong second quarter.
A strong quarter shapes the annual forecast
Sporting-event-adjusted GDP grew by 1.5 percent in the second quarter of 2026 compared with the previous quarter. According to SECO, growth was broadly supported across sectors and demand components. Almost half of the increase, however, came from the highly volatile value added of the chemical and pharmaceutical industry; a strong rise in exports was an additional factor.
That is precisely why the expert group warns against a simple reading. The quarterly figure is likely to overstate the underlying economic momentum. For the second half of the year it expects a certain countermovement. The higher annual figure is therefore not merely a statement about the coming months. It also contains the statistical effect of a strong first half.
For companies and households this difference is decisive. High annual growth can result from a single, very strong quarter without order books, incomes and consumption picking up to the same degree and across all sectors. The forecast describes expected total economic output – it is not a promise of an even upturn.
What actually supports the outlook
SECO names several reasons for the upward revision. Developments so far have been stronger than expected, and the global economic environment is somewhat more favourable. In addition, the recent depreciation of the Swiss franc supports the exchange-rate-exposed parts of the export economy. For 2026, foreign trade is therefore likely to contribute more to growth than the expert group assumed in June.
Domestic demand is also expected to grow moderately. According to the forecast, rising utilisation of production capacity supports investment activity; private consumption is likewise likely to develop moderately. For 2027 the forecast remains at 1.6 percent. A further revival of global demand is expected by then, in particular a recovery in neighbouring European countries and in Germany.
The higher figure for 2026 is thus not a single chemicals-and-pharmaceuticals effect. According to SECO it also rests on better sentiment indicators, exports and a moderate domestic economy. The extraordinary quarterly figure nevertheless remains a reason to read the revision with caution.
Prices and labour market: forecasts unchanged
On two indicators that are central for households, the federal government leaves its expectation unchanged. Average annual inflation is to be 0.6 percent in both 2026 and 2027. For the unemployment rate, the expert group continues to expect 3.1 percent in 2026 and 3.0 percent in 2027. It assumes that economic developments will show up with a delay in gradually falling unemployment figures.
That is a more sober finding than the GDP revision: in its baseline scenario the federal government expects neither an abrupt easing on the labour market nor a new inflation surge. Both rest on assumptions, including declining crude oil prices over the course of the coming months.
The risks are part of the calculation
The forecast is expressly not an all-clear signal. SECO names the conflict in the Middle East, high energy prices and trade-policy uncertainty as considerable risks. Persistently high crude oil prices could weigh on the global economy and also push up inflation in Switzerland. Because European gas storage levels are low, further price increases for natural gas are also possible.
For their baseline scenario, the experts assume that US import tariffs remain essentially at their current level. At the same time, they point out that further changes to US tariff policy and additional trade-restricting measures are possible. Corrections on financial markets, global debt and possible upward pressure on the franc are also among the uncertainties.
The better economic forecast is therefore above all a more precise interim assessment: Switzerland is starting the year stronger than expected. Whether this turns into a sustainable upturn now depends less on the quarterly figure than on energy, the global economy, trade and the breadth of the domestic economy.
