By John Revill
ZURICH -Switzerland’s economic upswing is expected to ease this year as higher inflation, the war in Ukraine and renewed Chinese lockdowns slow the post-pandemic recovery that generated 0.4% growth in the first quarter, the government said on Tuesday.
Rising prices are proving a drag on many European economies as they reduce disposable incomes of households forced to spend more on fuel and food.
Lockdowns in parts of China to check new coronavirus outbreaks also make it harder for companies to get vital components and close off parts of the country’s huge internal market.
“High uncertainties persist and have increased particularly in China,” said Ronald Indergand, an economist at the State Secretariat for Economic Affairs (SECO).
“It’s possible that we see slower growth this year abroad and in Switzerland compared with our previous forecast,” he told Reuters.
“But we will still see substantial growth rates of GDP,” he said. “I don’t think there is a risk of an immediate recession because there is still room for the post-pandemic recovery to continue.”
SECO is due to give its latest forecasts on June 15 after forecasting growth of 2.8% in March, although Indergand declined to comment on potential downward revisions.
“There is still space for a strong rebound effect, particularly in areas like hospitality and the transportation sectors which I expect to see materialise in the second and third quarters of this year,” he said.
The economy grew by 0.4% during the first quarter of 2022, driven by a strong uptick in manufacturing as international demand recovered for precision instruments, watches and jewellery in particular.
When sporting events were not taken into account, GDP grew 0.5% during the quarter.
Year on year, the economy grew by 4.2% in the January to March period, up from 3.6% in the fourth quarter of 2021.
(Reporting by John Revill; Editing by Michael Shields)
