Switzerland: Deflation risk

The sharp downturn of economic activity is expected to continue throughout 2009, reflecting the fall in world trade. A slow recovery in the course of 2010 will be led by gradually improving exports, notably to East Asia.

Unemployment is projected to exceed 5% in 2010 and prices may decline towards the end of 2010.

With low capacity utilisation and a risk of deflation, policy interest rates should remain close to zero. Further fiscal stimulus would diminish the risk of deflation. To prevent persistent unemployment, measures should be taken to improve incentives for cantons to place the unemployed into jobs more GDP growth quickly and ensure a sufficient supply of apprenticeships.

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See also www.oecd.org/switzerland

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©OECD Observer No 274, July 2009

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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