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Swiss Economists Cut Growth Forecast as Inflation Expectations Rise for 2026

Swiss economic growth is expected to slow slightly this year, according to the latest KOF Consensus Forecast compiled by the ETH Zurich economic institute. Economists have downgraded growth expectations while also revising inflation forecasts upward.

GDP Growth Forecast Reduced

Economists now expect Switzerland’s real GDP to grow by 0.9% in 2026, down from the previous forecast of 1.0%. The revision signals a slightly weaker economic outlook compared with earlier expectations. The KOF Institute reported that overall economic momentum is weakening, particularly due to reduced expectations for fixed capital investment. However, growth for 2027 remains unchanged at 1.5%, suggesting a gradual recovery in the medium term.

Inflation Forecasts Move Higher

Inflation expectations have been revised upward across the forecast period. Economists now expect inflation to average:

  • 0.7% in 2026
  • 0.8% in 2027

These figures represent an increase of 0.3 and 0.2 percentage points respectively compared with the previous survey. Despite higher inflation expectations, price growth remains relatively moderate by international standards.

Labour Market Stability Continues

The labour market outlook remains steady. Economists continue to forecast an unemployment rate of 3.1% for 2026, unchanged from earlier projections.

This indicates that while growth is slowing, Switzerland’s employment market is expected to remain stable.

Swiss Franc Expected to Stay Strong

The survey also highlights expectations for currency stability and strength:

  • Swiss franc expected to appreciate against the US dollar
  • Expected exchange rate: 0.78 CHF/USD in 3 months
  • Expected exchange rate: 0.76 CHF/USD in 12 months
  • Euro forecast remains stable at around 0.90 CHF/EUR

Analysts suggest the franc will continue to act as a safe-haven currency amid global uncertainty.

Economic Outlook: Cautious but Stable

Overall, the KOF survey indicates a cautious outlook for the Swiss economy. Growth is slowing slightly, inflation is edging higher, but employment and currency stability remain strong. Economists describe the situation as a period of moderate but stable economic performance, rather than a sharp downturn.