By Brenna Hughes Neghaiwi
ZURICH (Reuters) – Switzerland’s economy is expected to grow by 3.2% this year, the government said on Thursday, lowering its full year outlook as a less sunny global picture limited Switzerland’s recovery.
According to the State Secretariat for Economic Affairs, “The economic recovery looks set to continue as anticipated” despite growth being slower than previously forecast.
The government expert group stated that a slower global recovery was due to capacity bottlenecks that limited global industrial production growth and strict coronavirus protections which hampered the service sector in certain countries. Switzerland’s expected economy growth this year will be less than its June forecast of 3.6%.
According to latest data, there was a less severe economic recession in 2020, so the potential catch-up is smaller overall.
In the second quarter of 2018, growth was seen in Switzerland, although not at the same rate as predicted by economists. COVID-19 restrictions being eased helped reverse two consecutive quarters that had been markedly contracted.
SECO Thursday stated that economic activity will likely have exceeded levels pre-crisis during the summer.
While inflation is up slightly, central bank officials warned that the coronavirus crises continues to present uncertainties. However, they have also noted an increase in inflation. These temporary increases are possible.
In an effort to ease pressure on hospitals struggling to deal with the fourth wave of infection, Switzerland has imposed additional pandemic-related restrictions on Monday. This required people to present a COVID status certificate in order to be allowed to access bars, restaurants, and indoor spaces.
New travel restrictions are being considered by the government for those who haven’t been vaccinated.
SECO indicated that the most vulnerable sectors, such as international tourist, are more likely to recover from the crisis with a less tense attitude. The economic recovery must continue unabated, as long as no restrictive measures, such business lockdowns, are imposed over the next few months.
According to the government, there is a chance that the economic recovery will continue. The Swiss economy was expected to expand at 3.4% per year in 2022. This rate is higher than the previous 3.3% forecast.
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