The Swiss economy expanded by +1.4% in 2025, outperforming the growth of +1.2% recorded in 2024. Less welcome was the rise in unemployment, driven partly by the integration of Credit Suisse into UBS as well as by the export-related challenges associated with the US. However, Swiss unemployment remains at a moderate rather than elevated level when viewed in a historical context. Broadly speaking, the economic growth registered in 2025 was driven by the relatively dynamic service sectors. Private consumption remains robust, supported by the general decline in inflation. Although the Iran war has seen an increase in energy prices, Switzerland is less dependent on oil and gas than many other European and, in particular, Asian economies thanks to its highly diversified energy mix. 

While Swiss economic growth is not being driven by technology investments to the same extent as in the US, the country stands to benefit from economic stimulus measures implemented by neighbouring European countries, and by Germany in particular, both this year and next. Increased defence spending by the governments of many European countries and substantially higher levels of infrastructure investment in Germany are likely to generate positive spillover effects for Swiss economic activity. It is not yet fully clear just how US tariff decisions will impact the pharmaceuticals sector, even though both Novartis and Roche are known to have reached an agreement with the US government last December. The outlook is complicated by the announcement of new US tariffs of 15% in April 2026, which the Federal Council has labelled an additional burden. 

Since 2024, inflation in Switzerland has gradually declined from 1% towards a range of 0% to 0.5%, promoting discussions about the reintroduction of negative interest rates. However, such a move appears undesirable from the perspective of the Swiss National Bank. Negative interest rates would entail disadvantages for the banking sector and are not warranted as long as inflation remains broadly stable or trends slightly higher. An inflation range of between 0% and 0.5% should come as no surprise during the course of 2026, provided there are no unexpected external shocks, such as further geopolitical escalations or emerging signs of recession. Swiss industrial production has once again shown a more moderate rate of expansion in recent times, but it too could benefit from Germany’s economic stimulus measures. Historically, domestic demand in Switzerland has been underpinned by a strong construction sector and rising private consumption. This pattern could continue in 2026, as lower key interest rates lend support for both sectors. 

Even though stronger-than-expected growth in the EU could lend support to the euro, the Swiss franc continues to benefit from several very positive factors relative to other countries. Firstly, Switzerland has a balanced budget. This is in contrast to both the US and the Eurozone, both of which have growing budget deficits. Secondly, Swiss government debt as a percentage of gross domestic product is substantially lower than in other major economies.  This reflects the fiscal capacity of Switzerland, providing considerable scope for growth-supporting measures should global or domestic demand weaken.  And thirdly, inflation in Switzerland remains very low compared to other countries. In fact, it is the lowest of all industrialised nations, i.e. those belonging to the international Organisation for Economic Co-operation and Development (OECD). Relatively low inflation by international standards, low public debt and a balanced fiscal budget have historically acted as stabilising anchors for the Swiss franc, making Swiss investments particularly interesting for foreign investors.

Conclusion: although Switzerland faces economic challenges, as is the case in other countries, economic growth over the coming quarters is likely to remain broadly in line with its long-term positive trend.
 

Contact a client advisor for more information.

_{This publication is intended for information and marketing purposes only, and is not geared to the conclusion of a contract. It only contains the market and investment commentaries of Maerki Baumann & Co. Ltd. and an assessment of selected financial instruments. Consequently, this publication does not constitute investment advice or a specific individual investment recommendation, and is not an offer for the purchase or sale of investment instruments. The future performance of investments cannot be inferred from past price performance. In other words, the value of investments may increase but may also decrease, and the investor may be required to make additional payments for certain products. In certain circumstances, figures may refer to reporting periods of less than five years, which could reduce their validity. Predictions for the future are always non-binding assumptions. Figures presented in foreign currencies are also subject to exchange rate fluctuations, which can affect their performance. The information in this publication is in no way to be understood as an assurance of future performance. Maerki Baumann & Co. Ltd. does not provide legal or tax advice. In addition, Maerki Baumann & Co. Ltd. accepts no liability whatsoever for the content of this document; in particular, it does not accept any liability for losses of any kind, whether direct, indirect or incidental, which may be incurred as a result of using the information contained in this document and/or arising from the risks inherent in the financial markets.}

_{*Please note that due to German regulatory requirements we are unable to provide the services (crypto focus module) named in this brochure to our clients domiciled in Germany. The real estate focus module is only available to qualified clients domiciled in Switzerland.}

Editorial deadline: 1 July 2026

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