The Executive Board of the International Monetary Fund (IMF) completed its Article IV Consultation with Switzerland on September 10, 2025. The consultation process is part of regular bilateral discussions in which IMF staff assess a country's economic developments and policies through meetings with officials, followed by a report discussed by the Executive Board.
According to the IMF, Switzerland's economic growth is expected to gradually return to its potential by 2028. However, near-term performance remains constrained due to global trade tensions and uncertainty. Risks include the possibility of escalating trade disputes, unstable energy markets, and increased safe-haven capital flows that could impact Switzerland’s export-driven economy. There are also opportunities for improved growth if ongoing talks with the United States result in reduced tariffs.
The Swiss National Bank’s recent decision to cut its policy rate to zero was deemed appropriate given low inflation and weakening labor market conditions. The IMF noted that further policy easing options are limited and recommended careful calibration of available tools as well as clear communication during this period of heightened uncertainty.
For fiscal policy, the IMF assessed Switzerland’s expansionary stance for 2025 as suitable in light of moderate economic slack. Nonetheless, demographic changes, climate commitments, defense spending, and pension reforms require a medium-term fiscal strategy that balances these demands within the constraints of Switzerland's debt-brake rule.
The Credit Suisse crisis prompted important changes to Switzerland’s Too-Big-To-Fail framework. The IMF stressed that maintaining financial stability will depend on fully implementing enhanced supervisory powers, expanding macroprudential tools—especially regarding real estate risks—and strengthening financial safety nets appropriate for Switzerland’s globally significant financial sector.
To sustain productivity leadership, the IMF advised reducing administrative barriers, improving access to research and development resources, and ensuring stable market access amid increasing geo-economic fragmentation.
IMF Executive Directors commended Switzerland for strong economic fundamentals supported by robust institutions and prudent policies. They recognized challenges from trade fragmentation and higher external tariffs but welcomed efforts to maintain market access through engagement with key partners such as the European Union. Directors supported continued prudent policies and multilateral cooperation.
On fiscal matters, most Directors agreed that a moderately expansionary stance is appropriate for 2025 but emphasized maintaining flexibility within the debt-brake mechanism should adverse shocks occur. They pointed out that aging-related expenditures, climate goals, and defense needs will increase spending pressures over time and called for both rationalizing expenditures and mobilizing revenues. Ongoing tax reform efforts were welcomed along with suggestions to broaden the tax base.
Directors found recent monetary easing justified but cautioned against further rate cuts below zero without considering potential risks to financial stability—including weaker bank profitability and real estate exposures. They suggested reviewing aspects of monetary policy frameworks such as communication tools to strengthen guidance in uncertain conditions.
Directors also referred to findings from the 2025 Financial Sector Assessment Program (FSAP), which concluded that Switzerland’s financial system is resilient but faces vulnerabilities related to real estate exposures and low interest rates. Swift implementation of reforms—such as strengthening FINMA’s supervisory powers—was encouraged alongside greater vigilance regarding anti-money laundering (AML), counter-financing terrorism (CFT), and cyber risks.
Regarding structural competitiveness, Directors noted persistent productivity gaps among smaller firms and service sectors due in part to limited access to finance, R&D constraints, a small domestic market, and regulatory frictions. They urged continued streamlining of business procedures, enhanced competition measures, improved SME financing options, and effective implementation of reforms like those made to the Cartel Act and Vocational Training Act.
Further information about Article IV Consultations can be found at https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/16/31/Article-IV-Consultations .