The economy KOF becomes more pessimistic because of Trump
The trade conflict instigated by the USA is leaving its mark. The economic researchers at ETH Zurich (KOF) have become much more pessimistic.
16.06.2025, 10:20
SDA
For the current year, they have confirmed their forecast of a 1.4 percent increase in real gross domestic product (GDP, after adjustment for the effects of sport), as they announced on Monday. However, this forecast is only being maintained due to a data revision.
Apart from this, the economic assessment has deteriorated significantly compared to the last forecast in March, according to the communiqué. The Swiss economy is suffering from the protectionist trade policy of the United States.
This is reflected not least in the forecast for 2026, which has been lowered from 1.9% in March to 1.5%.
Consumption is starting to weaken
According to the KOF, economically sensitive sectors in particular are feeling the effects of the trade conflict. The investment climate has recently deteriorated.
Consumer sentiment has also deteriorated. Private consumption is increasingly suffering from a weakening labor market. Low inflation, which according to the KOF will only amount to 0.2 percent this year, and the presumably low interest rates will at least have a supporting effect in the near future, according to the forecast.
Recession with higher tariffs
According to the KOF, the basic assumption for these forecasts is that the current level of customs duties will be maintained. This means a flat tariff of 10 percent on most imports into the USA, with pharmaceutical products largely exempt.
However, if Trump implements the tariff package announced on "Liberation Day", Switzerland can expect a brief recession, according to the KOF. Conversely, if the tariffs introduced by the US president are completely lifted, growth rates would be significantly higher. "The forecast risks are still manifold," summarizes the KOF.
