Economic forecast: outlook improves slightly
Bern, 15.12.2025 — The Federal Government Expert Group on Business Cycles has slightly revised upwards its forecast for economic growth in 2026 (GDP adjusted for sporting events: 1.1%; October forecast: 0.9%). The reduction in US tariffs has improved prospects for the sectors concerned. In 2027, growth in Switzerland is expected to normalise at 1.7% as the global economy gradually recovers. The forecast is based on the technical assumption that international tariffs will remain at current levels. However, uncertainty remains high.
2025 has been marked by considerable volatility in foreign trade and GDP data. Above-average growth in the first quarter was followed by the anticipated correction. In the third quarter, Switzerland's GDP contracted, primarily due to a downturn in the chemical and pharmaceutical industry. Available data and surveys indicate that GDP growth will resume in the final quarter of the year.
The reduction in US tariffs on Swiss products has strengthened the outlook and planning certainty for directly affected sectors and companies. This forecast is based on the technical assumption that international tariffs will remain at current levels and that the trade conflict will not escalate again.[1] Nonetheless, global uncertainty surrounding trade and economic policy remains elevated and the Swiss franc continues to be highly valued.
Against this backdrop, the Expert Group has slightly raised its growth forecast. The Swiss economy is now expected to grow by 1.1% in 2026, following 1.4% in 2025 (October forecast: 0.9% in 2026, following 1.3% in 2025). This brings the outlook for the Swiss economy broadly in line with the June forecast, when US tariffs stood at 10%.
Foreign trade is expected to provide a positive, albeit moderate, stimulus in the coming year, with goods exports in the coming quarters forecast to exceed October expectations. Domestic demand, however, will remain the main driver of growth. Investment activity is likely to strengthen slightly as capacity utilisation rises. Low inflation is supporting real incomes: inflation is forecast to average 0.2% in both 2025 and 2026 (October forecast: 0.2% in 2025, 0.5% in 2026). Private consumption is therefore expected to remain solid, although subdued growth momentum will continue to weigh on the labour market. The unemployment rate is forecast to rise to an annual average of 3.1% in 2026 (October forecast: 3.2%).
For 2027, a moderate acceleration in global demand is anticipated. Other European countries, particularly Germany, should gradually recover from their current weakness, supporting Swiss exports. Consequently, Swiss economic growth is likely to normalise at 1.7% alongside a moderate upturn in investment, with average annual inflation of 0.5%. The unemployment rate is expected to fall to an annual average of 2.9%.
Economic risks
Despite some easing of tensions, uncertainty remains high regarding international economic and trade policy and its macroeconomic impact. For example, additional sectoral tariffs by the US and the EU would dampen foreign trade. Conversely, further easing of international trade policy would support more favourable developments.
Other economic risks persist. A deterioration in the international environment cannot be ruled out. Financial markets remain vulnerable to significant corrections. Risks related to global debt – especially sovereign debt – have intensified. Balance sheet risks in financial institutions and vulnerabilities in real estate markets also persist. Geopolitical risks remain elevated, particularly in connection with the armed conflicts in Ukraine and the Middle East. Should any of these risks materialise, further upward pressure on the Swiss franc would be expected.
[1] Further information can be found in the economic forecast section of ‘Konjunkturtendenzen’ for winter 2025/2026 (available in German) and at www.seco.admin.ch/economic-forecasts.