By Brenna Hughes Neghaiwi
ZURICH (Reuters) – The Swiss economy is expected to grow 3.2% this year, the government said on Thursday, lowering its outlook for the full year as a less sunny global situation limited Switzerland’s recovery.
“The economic recovery should continue as expected, even if growth is initially less dynamic than expected,” said the Secretary of State for the Economy (SECO) in a statement.
A less vigorous global recovery, marked by capacity bottlenecks limiting the growth of global industrial production and stricter coronavirus measures hampering the service sector in some countries, meant that the Swiss economy was expected to grow less this year. year than the 3.6% growth it forecast in June, said a panel of government experts.
“The downward revision … is also due to the fact that, according to the latest data, the economic crisis in 2020 has not been so severe, which means that the potential for catching up is also lower overall.”
The Swiss economy returned to growth in the second quarter, but not as strongly as economists had expected, as the easing of COVID-19 restrictions helped reverse two consecutive quarters of contraction.
SECO said on Thursday that economic activity would likely have surpassed pre-crisis levels over the summer.
Inflation has also picked up, but central bank officials have warned that the coronavirus crisis continues to pose uncertainties and the increases may be temporary.
Switzerland imposed new pandemic-related restrictions on Monday, requiring people to present a COVID status certificate to enter bars, restaurants and other indoor spaces and at events, in a bid to ease pressure on hospitals who are struggling to cope with a fourth wave of infections.
The government is also considering new travel restrictions for people who had not been vaccinated or cured of the virus.
“Highly exposed sectors such as international tourism are likely to emerge from the crisis with more hesitation,” SECO said. “However, provided that severely restrictive measures such as business closures are not imposed in the coming months, the economic recovery is expected to continue unabated.”
The recovery is expected to accelerate next year, with the Swiss economy expected to grow at a rate of 3.4% in 2022, the government said, higher than its previous forecast of 3.3%.
(Reporting by Brenna Hughes Neghaiwi; Editing by Riham Alkousaa and Emelia Sithole-Matarise)
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