ZURICH (Reuters) – Switzerland’s economy is expected to grow by 3.6% this year, the government said on Tuesday, raising its full year outlook as the easing of coronavirus restrictions boosts confidence in the recovery.
The government said it expected a “swift recovery” in the domestic economy, while the international situation also looked brighter as it raised its forecast from the 3% increase it had predicted in March. [S8N2MD0C0]
The upturn will be maintained next year, with the Swiss economy expected to grow at an above-average rate of 3.3% in 2022, the government said.
“Following the gradual easing in early March, the domestic economy has begun to recover rapidly,” the State Secretariat for Economic Affairs (SECO) said in a statement.
“Industrial production also rose considerably, buoyed by the strong resurgent demand from key trade partners. The indicators are pointing to further increases in both the industrial and the service sector.”
Forward-looking data has showed strengthening economic activity in recent weeks, with May’s Purchasing Managers’ Index reaching its highest-ever level.
The forward-looking KOF indicator, which indicates the progression of the economy in six months’ time, also hit its highest-ever level in May.
Switzerland has been pressing ahead with easing pandemic-related measures, unveiling plans to limit entry restrictions into the country this month and further opening up public life as COVID-19 cases continue to decline.
The government will decide on June 23 whether to go ahead with a fifth wave of re-opening measures, including abolishing the requirement to wear masks in public, raising seating limits at restaurants and reopening discos.
Provided that the planned easing goes as planned, the economic recovery is likely to become more widespread as time goes on, SECO said on Tuesday.
In particular, consumer sectors that were severely restricted for a long time due to the pandemic should experience considerable catch-up effects, it said.
“This would increasingly enable areas of the economy that have been heavily affected, such as accommodation and food services and events, to find their way out of the current crisis too,” it added.
(Reporting by John Revill; editing by Brenna Hughes Neghaiwi)
