Switzerland
Solid start, growing headwinds
The Swiss economy remains stable in the second quarter, but is under increasing external pressure. Falling interest rates and solid corporate profits are supporting the economy and the domestic stock market. Despite global uncertainties, the Swiss stock market remains attractive - supported by defensive business models, stable margins and high earnings visibility. We find the SPI Extra, which tracks medium-sized and smaller listed Swiss companies, particularly interesting. In the past, stocks in this segment have proven to be particularly adaptable to currency movements and benefit from their agility, innovative strength and strong roots in their home market.
The Swiss economy recorded stable growth in the first half of 2025, driven largely by the services sector and the pharmaceutical industry, in particular by significant exports to the US. However, this momentum is expected to weaken as the year progresses. Advance demand is declining, the new US tariffs of 10.00% are having a negative impact and the strong Swiss franc currency poses a further problem for the export industry. At the same time, investment sentiment among companies has deteriorated. Below-average GDP growth of 1.30% is forecast for 2025. Private consumption is having a stabilizing effect, supported by low inflation and continued immigration. The service sector and the construction industry are also showing continued robustness.
The Swiss National Bank recently lowered its key interest rate to 0.00% in response to declining price pressure. In May, inflation stood at -0.10% for the first time in years. If there are no major economic upheavals or an escalation of the trade conflict and the Swiss franc remains stable, particularly against the euro, the SNB is unlikely to make any further interest rate changes.
SECO economic forecasts
GDP 2025 1.30%
Inflation 2025 0.10%
Guiding interest rate 0.00%
Dino Marcesini, Partner
Sources: Chefinvest, ZKB, SECO
As at: 07.07.2025