By John Revil
ZURICH (Reuters) – Switzerland’s economic recovery is expected to ease this year, with rising inflation, war in Ukraine and new Chinese lockdowns slowing the post-pandemic recovery that generated 0.4% growth in the first quarter, the government announced on Tuesday.
Rising prices are proving to be a drag on many European economies as they reduce the disposable incomes of households forced to spend more on fuel and food.
Lockdowns in parts of China to control new coronavirus outbreaks are also making it harder for companies to obtain vital components and shut down parts of the country’s huge domestic market.
“Strong uncertainties persist and have increased particularly in China,” said Ronald Indergand, economist at the State Secretariat for Economic Affairs (SECO).
“It is possible that we will see slower growth this year abroad and in Switzerland compared to our previous forecasts,” he told Reuters.
“But we will still see substantial GDP growth rates,” he said. “I don’t think there is a risk of an immediate recession as there is still room for the post-pandemic recovery to continue.”
SECO is due to give its latest forecast on June 15 after forecasting 2.8% growth in March, although Indergand declined to comment on any downward revisions.
“There is still room for a strong rebound effect, particularly in areas like hospitality and transportation which I expect to see materialize in the second and third quarters of this year,” he said. he declares.
The economy grew by 0.4% in the first quarter of 2022, driven by a strong recovery in manufacturing, with international demand picking up for precision instruments, watches and jewelry in particular.
Excluding sporting events, GDP rose 0.5% in the quarter.
Year-on-year, the economy grew 4.2% between January and March, compared to 3.6% in the fourth quarter of 2021.
(Reporting by John Revill; Editing by Michael Shields)