Swiss Economy Forecasted for Modest Growth in Q1 2024, as Service Sector Drives Expansion

In the January-March period, the Swiss economy is forecasted to have performed slightly better than in previous quarters, according to the Swiss National Bank. The central bank stated in a report that many economic indicators suggest a more dynamic economic activity in the first quarter of 2024. During the final three months of 2023, the Swiss economy grew by 0.3% quarter-on-quarter.

The SNB mentioned that the moderate economic growth during the first quarter was mainly driven by the service sector, while manufacturing remained stagnant. Weak global demand and challenges related to the Swiss franc exchange rate were highlighted as concerns for the manufacturing sector. Companies in manufacturing are struggling with pricing and facing pressure on their margins.

Despite these challenges, the central bank reported that companies in manufacturing are anticipating an increase in sales due to improved business outlooks. This positive outlook indicates a potential improvement in economic conditions for Switzerland in the near future, as companies in service sectors are expecting robust growth to continue. Additionally, after recently cutting its key interest rate for the first time in nine years, the SNB stated that it is closely monitoring global economic developments and is prepared to adjust monetary policy if necessary.