The economy BAK expects slightly higher growth for 2024

The economic researchers at BAK Economics have become slightly more optimistic for the current year. However, in their opinion, the Swiss economy is not likely to really pick up until 2025.

Specifically, the BAK forecasters are now predicting growth in real gross domestic product (adjusted for the effect of sporting events) of 1.2 percent for 2024, having previously assumed growth of 1.1 percent. The unchanged growth forecast for 2025 is then a significantly higher 1.8 percent.

"2024 will therefore remain an interim year," said BAK economist Alexis Bill-Körber at an online event on Thursday. And in his opinion, the transition to higher growth will not be linear.

An acceleration is to be expected for the second quarter, for example, but then a smaller increase again in the third quarter. Only then will the higher growth consolidate.

Consumption weakens

One reason for the relatively weak growth in the current year is the rather weak consumption. It is true that inflation has receded, which should boost consumption according to the textbook. "But the drivers of inflation have shifted to components that are difficult to avoid," says Bill-Körber. In particular, higher rents and more expensive electricity. Added to this are the increased health insurance premiums. All of this is having a dampening effect on the mood to buy.

However, BAK Economics assumes that inflation will fall from 1.4 percent in the current year to 0.9 percent in 2025. This will then help to boost consumption.

According to the forecast, the Swiss economy will also be supported in the longer term by rising exports and higher investments. These would be boosted by an improving economy in the eurozone - triggered by lower inflation and further interest rate cuts.

However, Bill-Körber also expects only a gradual improvement for the eurozone and the global economy. "The economy has bottomed out and is on an upward trajectory, but it is still rather weak."