According to an initial estimate by the State Secretariat for Economic Affairs (SECO), the Swiss economy grew by 0.2 percent in the fourth quarter. Positive growth impetus was seen mainly in the chemical and pharmaceutical industries, hospitality and government-related sectors. Conversely, there was a significant decline in the entertainment sector, due in particular to the major Swiss-based sporting associations. The sector’s value added normalized in the fourth quarter, having risen sharply in the summer months thanks to the Olympic Games and the European football championship. Looking at the first two months, the new year also seems to have got off to a good start. Consumer spending among private households remains robust for the time being, even though sentiment indicators point to growing uncertainty about future economic performance.
Economy: Growing economic uncertainty
The last few weeks have seen a marked increase in negative economic news. On the one hand, there is a palpable sense of uncertainty in response to the American president’s aggressive trade policy. This uncertainty is not limited to American households and companies, but also evident, for example, among Swiss consumers. And on the other, some real economic data has also been disappointing. In the USA, consumer spending declined appreciably in January, while in China the inflation rate slipped back into negative territory, increasing concerns about the global economy.
Growth, sentiment and trend
In percent
US economic data has been somewhat disappointing so far this year, once again highlighting the risk that a significant slowdown may be imminent. This has come, in particular, due to a substantial deterioration in consumer confidence, a decline in companies’ willingness to invest and lower consumption figures. However, economic data was not all weak, with order books at American companies still healthy and a labour market that remains close to full capacity. Activity in the construction sector, a key driver of economic performance, also continues to be stable, although significantly below the levels of 2021 and 2022.
Growth, sentiment and trend
In percent
The economic stagnation of the eurozone’s two heavyweights, Germany and France, continues to weigh on the region’s economy, which remains weak. Economic data in the first few months of the new year saw little improvement. Against this backdrop, huge fiscal policy stimulus measures are now expected to pave the way for an upturn. Germany is looking to establish a special fund of 500 billion to modernize its infrastructure, while also increasing defence spending by exempting parts of the budget from its debt brake. The European Union has also signalled its intention to increase defence spending significantly through new borrowing. However, given that the investment cycles for infrastructure and defence spending tend to be long, the short-term economic impact is likely to be limited.
Growth, sentiment and trend
In percent
The latest economic figures from China, by far the largest emerging market economy, were unexpectedly disappointing. The country’s official statistics office reported an 8.4 percent decline in import volumes for January and February compared to the same period last year, indicating continued weakness in domestic demand. At the same time, there was a huge drop in inflation, with core inflation, which excludes volatile energy and food prices, falling from 0.6 percent to –0.1 percent in an unwelcome return to negative territory. By contrast, the economic data from India, the second-largest emerging economy, is far more encouraging. The Indian economy appears to be gradually overcoming its temporary low last year, reflected with a significant upturn in business confidence.
Growth, sentiment and trend
In percent
Global economic data
| Indicators | Switzerland | USA | Eurozone | UK | Japan | India | Brazil | China |
|---|---|---|---|---|---|---|---|---|
| Indicators GDP Y/Y 2024Q3 |
Switzerland 1.9% |
USA 2.7% |
Eurozone 1.0% |
UK 1.0% |
Japan 0.7% |
India 5.6% |
Brazil 4.1% |
China 4.6% |
| Indicators GDP Y/Y 2024Q4 |
Switzerland 1.5% |
USA 2.5% |
Eurozone 1.2% |
UK 1.4% |
Japan 1.1% |
India 6.2% |
Brazil 3.6% |
China 5.4% |
| Indicators Economic climate |
Switzerland = |
USA – |
Eurozone – |
UK – |
Japan + |
India + |
Brazil – |
China = |
| Indicators Trend growth |
Switzerland 1.3% |
USA 1.6% |
Eurozone 0.8% |
UK 1.8% |
Japan 1.1% |
India 5.3% |
Brazil 1.8% |
China 3.7% |
| Indicators Inflation |
Switzerland 0.3% |
USA 2.8% |
Eurozone 2.4% |
UK 3.0% |
Japan 4.0% |
India 3.6% |
Brazil 5.1% |
China –0.7% |
| Indicators Policy rates |
Switzerland 0.25% |
USA 4.5% |
Eurozone 2.65% |
UK 4.5% |
Japan 0.5% |
India 6.25% |
Brazil 13.25% |
China 3.10% |
Source: Bloomberg