Switzerland Raises 2026 Growth Forecast After Trade Agreement with the US

Bern – EcoPulse24

The Swiss government has raised its economic growth forecasts for the upcoming year, driven by the impact of a recent trade agreement with the United States, while lowering inflation estimates following the central bank's decision to maintain its monetary policy without further easing.

According to data from the Swiss Federal Secretariat for Economic Affairs (SECO), the gross domestic product (GDP) – excluding the impact of major sporting events – is expected to grow by 1.1% in 2026, compared to previous estimates of 0.9% issued in September. The agency also projected growth to rise to 1.7% in 2027, marking the first official forecast for the following year.

Ongoing Risks Despite Improved Outlook

The agency noted that the improved forecasts come amid continued high levels of uncertainty related to international trade policies, tariffs, financial and real estate market conditions, as well as geopolitical risks and sovereign debt. It added that the realization of any of these risks could exert additional pressure on the Swiss franc.

Lower-Than-Expected Inflation

On the price front, the government has reduced its inflation forecast for 2026 to 0.2%, down from 0.5% in previous estimates, with an anticipated rise to 0.5% in 2027. These forecasts are even lower than those of the Swiss National Bank, which decided last week to keep interest rates at zero for the second consecutive time.

Analysts believe that reducing rates below zero remains a challenging option at this stage, given its implications for the financial system, amid expectations that monetary policy will remain stable for the remainder of this cycle.

Background of the Trade Agreement

The resolution of the trade dispute with the United States is viewed as a key factor in returning the Swiss economy to a more stable growth path, following its first quarterly contraction since 2023 in the third quarter of this year. The United States had imposed tariffs of up to 39% on several Swiss exports in August, before both parties reached a preliminary agreement in November that reduced tariffs to 15%.