ZURICH (Reuters) – The Swiss economy could grow at more than double its usual rate in 2021 and 2022, with GDP increasing by around 4% in both years as output recovers from the coronavirus epidemic, the government’s chief economist told newspaper NZZ am Sonntag.
In its “positive scenario”, the government expects the global economy to recover from the middle of 2021, Eric Scheidegger said, a situation which should help Switzerland’s export-orientated economy.
The State Secretariat for Economic Affairs (SECO) in its December forecast said it expected GDP growth at 3% in 2021 and 3.1% in 2022 after output fell 3.3% in 2020, the worst downturn since 1975.
The economy typically grows at a rate of around 1.7% per year.
“In our positive scenario, we expect a strong recovery in the global economy from the summer onwards,” said Scheidegger, the head of the Economic Policy Directorate at SECO, told the newspaper.
“In this case, Switzerland could achieve growth of around 4% in both 2021 and 2022.”
The downturn in 2020, as companies saw their order books empty and much of the service sector closed down for long periods, generated an estimated loss of 72 billion Swiss francs ($81.32 billion) for the Swiss economy, he told the newspaper.
Government aid, which was equivalent to 5% of the GDP, prevented the downturn being worse and was far more than the support measures during the financial crisis, he said.
GDP should return to pre-crisis levels by the end of 2021, he added, with investments by companies supporting the recovery.
“Alongside consumption, investment is the second key driver: companies typically hold back in this respect during crises. But as soon as they have planning certainty again, many companies will focus on the upswing, ” Scheidegger told the newspaper.
Switzerland is one of the wealthiest countries in the world with an economy led by financial services and pharmaceuticals. Although outside of the European Union it has access to the bloc’s single market through a series of treaties.
Reporting by John Revill;Editing by Elaine Hardcastle