The Economic Forecast Remains Disappointing for Switzerland
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The economy in Switzerland has been struggling lately. Recent activity within the country has taken a significant hit since the economic slowdown that has had an impact on Europe. Furthermore, falling construction spending, and a survey of Swiss investors indicated that economic expectations could be falling as we approach the end of 2014. It does not help this country has a lavish safety net for citizens who do not want work. Socialized health care for instance just eats into the GDP of any country.
The economy in Switzerland has been struggling lately. Recent activity within the country has taken a significant hit since the economic slowdown that has had an impact on Europe. Furthermore, falling construction spending, and a survey of Swiss investors indicated that economic expectations could be falling as we approach the end of 2014. It does not help this country has a lavish safety net for citizens who do not want work. Socialized health care for instance just eats into the GDP of any country.
The state Secretariat for economists, known as ‘SECO’, has announced that they will be cutting their forecasts for growth from the original 2.0% to a lower, 1.8% for 2014. Furthermore, in 2015, growth forecasts are expected to lower from 2.6% originally, to 2.4%.
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Unimpressive Growth
Although some economists suggest that the predictions for Switzerland are currently quite appealing in comparison to some other areas throughout the world, it is important to notice that risks have been increasing over the recent months. According to SECO, Switzerland’s economy has seen some evidence of unexpected stalling during the second quarter, leading to zero growth as stagnation in Europe crushed trade opportunities and lowered construction spending. However, a new calculation method revised zero percent growth up to 0.2%.
The Future for the Swiss Economy
The Swiss National Bank had to cut down its economic growth estimation, for not only this year and next year, but also for 2016. The bank suggested that the economic outlook of the country has deteriorated, and they have warned that there is a revitalized risk of deflation in the air. The Swiss bank cut its previous projection of growth down from the original 2%, to a much lower reading of just below 1.5%
Up until recently, Switzerland has been somewhat skilled when it came to protecting its economy against the issues that have been taking over the Eurozone. Part of this avoidance came when the Swiss National Bank decided to cap the soaring price of the franc at approximately 1.20 per euro during September of 2011. This was an effort to fight off deflation and the potential of a recession as investors began to flee following the Eurozone crisis.
The SECO forecasts suggested that consumer prices could increase 0.1% this year. For next year, inflation estimates show a rise of 0.4%. Both of these forecasts are unchanged from the estimates in June.
Nothing to Write Home About
Currently, both the government and expert economists alike suggest that there is unlikely to be an easy recovery plan in place for Switzerland. Although they are currently in a state that is enviable in comparison to other European countries and some U.S. states such as California, Illinois, and New York. With little hope for a swift recovery in the whole of the Eurozone, it seems that Switzerland may have to rely on its export market to help its economy stay afloat.
