The Swiss economic growth is set to slow more than expected this year due to higher inflation and the Ukraine conflict, the State Secretariat for Economic Affairs, or SECO, said on Monday.
According to the latest quarterly forecast, the expert group of SECO lowered the growth forecast for 2022 to 2.8 percent from 3.0 percent. Meanwhile, the projection for next year was maintained at 2.0 percent.
The war in Ukraine poses major risks for the global economy. Even without international military escalation, the SECO noted that there is a risk of more severe economic impacts than assumed in the current forecast.
On the other hand, the expert group observed that the pandemic situation improved faster than anticipated.
The expert group adjusted its 2022 inflation forecast to 1.9 percent from 1.1 percent projected in December. Thereafter, inflation is predicted to fall to an average of 0.7 percent in 2023, unchanged from the previous outlook.
For the labor market, the expert group anticipated further recovery and is forecasting an average unemployment rate of 2.1 percent in 2022, followed by 2.0 percent in 2023.