Switzerland's economy shrank for the first time in 2 years - 0.5% drop reflects impact of US tariffs before deal
The Swiss economy shrank in the third quarter for the first time in more than two years, highlighting the impact that high U.S. tariffs had before officials secured a trade deal last week.
Gross domestic product shrank 0.5% from the previous three months, according to the government's first estimate. That compares with a 0.1% increase in the April-June period and is much weaker than the 0.1% decline forecast by economists in a Bloomberg survey.
“Driven by a sharp decline in value added in the chemical and pharmaceutical sectors, industry as a whole recorded negative growth,” the State Secretariat for Economic Affairs said. “The services sector expanded at a below-average pace.”
This was only the second quarter of contraction the country has seen since the Covid pandemic, but it still performed better than many of its European neighbors. But 39% US tariffs, imposed in early August, have significantly hurt the export-oriented economy. Following the deal that reduced duties to 15%, a rapid recovery in growth is considered possible.
The agreement brings particular relief to Swiss watchmakers, carmakers and precision instruments. Along with food and chemical producers, they were hit hardest by the 39% tariff, according to the Swiss central bank. Other key exports, such as medicines and gold, have been and remain exempt from tariffs under various regimes applied by the United States.
Economists have raised their forecasts for Switzerland after the deal. The pact almost halve the expected impact on exports to the US. The breakthrough also gives Switzerland a competitive advantage over other countries, lowering the average tariff rate on all its sales to the US below that of the EU and the UK.
Exporters are also facing the brunt of a strong franc, which rose to a decade-high against the euro after the deal was reached. The strengthening currency could push the Swiss National Bank to return to negative interest rates, having already cut its key rate to zero. However, a separate Bloomberg survey showed that most economists expect rates to remain unchanged until 2027.
In the first 10 months, Albania welcomes over 11 million visitors - Minister Gonxha: 7% more tourists than a year ago
Albania continues to experience an increase in tourist influx throughout 2025. The Minister of Tourism, Culture and Sports, Blendi Gonxhja, announced in a......
Greece, the number of tourists increases by over 22% - Only Serbia and Malta recorded better results in Europe
Greece has seen one of the biggest increases in international arrivals in Europe compared to 2019. The country also appears to be benefiting from new trends......
How has this week started for the major currencies?
The US dollar did not fluctuate significantly over the weekend, being bought today at 82.6 lek and sold at 83.6 lek compared to the previous week according......
Britain "abandons" tax hike plans - Improved fiscal forecasts give government "breathing space"
British Finance Minister Rachel Reeves has no plans to raise income taxes in this month's budget, thanks to improved fiscal forecasts, an inside source......
The spread of artificial intelligence in Europe - Which countries use it the most in everyday life?
Europeans are increasingly integrating artificial intelligence (AI) into their lives, but some countries are more prone than others, according to......
The startup ecosystem is being reformed - 9 million euros from the EU, the new draft law aims for the European integration of innovation
The government has submitted to the Parliament a draft law for several additions and amendments to the law "On the support and development of startups", with......
Albania opens the last chapter of negotiations with the EU
Albania has opened today the last Group Chapter of negotiations with the EU. After the delegation meeting, Prime Minister Edi Rama, European Union......
Edi Rama in Brussels for the opening of the last Group Chapter of negotiations with the EU
Albania marks another important historical moment in the country's integration process into the European Union. On Monday, November 17, the final group of......
