Swiss Economy Faces Growth Downgrade Amid Global Trade War Uncertainty

Switzerland has lowered its economic growth forecasts for 2025 and 2026, citing rising global trade tensions and declining export demand. The State Secretariat for Economic Affairs (SECO) revised its 2025 GDP growth projection to 1.3%, down from its earlier estimate of 1.4%. For 2026, the forecast was slashed to 1.2% from 1.6%. Both projections fall below Switzerland’s long-term average growth rate of 1.8%.

SECO emphasized that persistent uncertainty surrounding international trade and U.S. economic policy continues to impact both global and domestic economic outlooks. Although the Swiss economy showed resilience in early 2025, much of that momentum stemmed from exporters accelerating shipments before new U.S. tariffs took effect.

Looking ahead, SECO warned of a noticeable slowdown in economic performance for the rest of the year. The KOF Swiss Economic Institute echoed this sentiment, revising its 2026 growth estimate from 1.9% to 1.5%. KOF pointed to the “erratic trade policy” of the United States as a key concern, especially after Washington imposed a 10% tariff on Swiss exports. A previously proposed 31% import duty has been temporarily paused.

Alexander Rathke, head of forecasting at KOF, noted that a full imposition of the 31% tariff could trigger a mild recession in Switzerland by 2025. He warned that higher tariffs would make Swiss products significantly less competitive in the U.S. market, potentially rendering many exports unviable. However, Rathke assessed the likelihood of the higher tariff scenario as “very low.”

The Swiss government’s cautious stance highlights the increasing vulnerability of export-driven economies amid growing global trade disputes.