Economic and market overview and Switzerland's economic trends

Market overview

The resulting loss of confidence is having a negative impact on investments and consumption. By contrast, fiscal policy stimuli from individual EU countries are having a stabilising effect. For example, the German Bundestag has approved a comprehensive financial package of EUR 500 billion to strengthen defence and infrastructure. Nevertheless, the increased uncertainty has led to a downward revision of global growth forecasts for 2025.

Despite the tense international environment, the Switzerland real estate market has so far proved resilient. In cities such as Zurich, Basel and Geneva, demand for residential real estate remains high, leading to a sustained rise in prices. Real estate continues to be regarded as a safe investment, especially against the backdrop of low interest rates. However, future developments depend heavily on the international economy and political decisions.

After a robust fourth quarter of 2024, GDP growth is likely to have weakened in the first quarter of 2025. Parts of the industry remain in a difficult situation. New US tariffs of 25% on automotive imports and components are weighing heavily on Switzerland's suppliers and mechanical engineering companies. The SNB's recent cut in the key interest rate by 25 basis points to 0.25% is therefore seen as a supportive step by the export industry.

Switzerland's economic trends

Inflation continued its decline in February with an increase of just 0.3% compared to the previous year. The ongoing economic risks led both the SNB and the State Secretariat for Economic Affairs to set their inflation forecasts for 2025 at 0.4% and 0.3% respectively.

The expected real economic growth of 1.4% signals a moderate development. Although the interest rate cut is likely to have a stimulating effect, uncertainty regarding increasing trade tensions remains high.

The labour market continues to stabilise. The unemployment rate is rising only slightly and is expected to peak at 3%. Rising real wages and the stable employment situation should provide an additional boost to private consumption and thus support economic development.