Economists predict that Switzerland’s GDP has dipped for the second quarter in a row, indicating that the economy faces recession for the first time since 2009. Since scrapping its currency cap in January, which had sent the Swiss franc skyrocketing by up to 30 percent, the country’s export market continues to decline.
The Swiss economy also contends with plummeting pricing and sluggish manufacturing
According to Switzerland Global Enterprise, exports fell by a nominal 2.6 percent in the first half of the year, while a survey carried out by Credit Suisse claims that SME export sentiment in Q3 2015 hit a record low as a result of the strong franc.
The Swiss economy also contends with plummeting pricing and sluggish manufacturing, while tourism to popular ski resorts has also taken a hit as costs for holidaymakers surged. Although a drop in exports was anticipated following the decision to adopt a free float system, the level of weakness in investment and private consumption is somewhat unexpected.
While 2015 has proven to be a rocky year for the Swiss economy, things may be looking up as the Franc began to slip in August to its lowest levels since the currency cap was eliminated seven months ago. The continued stagnation of oil prices and recent assurance that the eurozone will not suffer from the shock of a Grexit, are likely to also have a positive affect on the Swiss economy. That being said, China’s economic slowdown may see detrimental consequences unfold in the global landscape – which could in turn have a deep impact on foreign demand for Swiss-made luxury goods.
A clearer picture of the current state of the Swiss GDP will be given on August 28 as the latest figures are released.