Switzerland is navigating a complex economic landscape, according to the International Monetary Fund (IMF) staff's concluding statement following their 2025 Article IV Consultation Mission. The IMF acknowledges Switzerland's strong economic fundamentals and competitive edge but highlights challenges such as global trade tensions and franc appreciation.
The ongoing Financial Sector Assessment Program has recommended enhancements in supervisory frameworks, especially in light of the Credit Suisse crisis. "Navigating these challenges will require broad policy consensus and effective macroeconomic management," states the IMF, emphasizing priorities like price stability and financial sector reforms.
Growth for 2025 is projected at 1.3%, slightly up from 2024, driven by private consumption and construction activity. However, global headwinds are expected to keep growth below potential through 2026. Inflation remains subdued due to franc appreciation and lower energy prices, with headline inflation projected at 0.1% by the end of 2025.
The IMF notes external risks such as geopolitical tensions and volatile energy prices could impact exports and investment confidence. Positive developments in tariff negotiations with the U.S., however, might improve growth prospects.
Monetary policy adjustments include a recent rate cut aimed at mitigating deflationary pressures amid declining inflation rates. The Swiss National Bank (SNB) may need further easing if deflation persists but should weigh trade-offs carefully given negative rate implications on bank profitability.
Fiscal policies face long-term challenges from demographic trends and climate change costs. A proposed Relief Package aims to cut expenditures significantly by 2027 to comply with debt regulations while pension payment increases necessitate additional revenue measures like VAT hikes.
In financial sectors, systemic risks persist due to real estate exposures despite overall resilience noted by FSAP findings. Reforms proposed post-Credit Suisse crisis aim to enhance governance and crisis management capabilities.
Structural policies focus on sustaining productivity through reduced administrative burdens and improved access to financing while maintaining robust EU relations via new sectoral agreements.
The IMF team expresses gratitude for the cooperation received during their mission from Swiss authorities including SNB officials.