Switzerland faces downside risks if full US tariffs bite, IMF says
The IMF expects the Swiss economy to grow by 1.3% this year, down from a previous 1.7% forecast. In its first forecast for 2026, the fund said it expects the Swiss economy to grow by 1.2%.
But if the open economy bears the full brunt of threatened U.S. tariffs, including charges on pharmaceutical imports, these forecasts could be revised downwards to 1.1-1% for 2025, and 1.0-0.9% in 2026, the IMF said.
'Downside risks are significant,' Gabriel Di Bella, head of the IMF delegation to Switzerland, told reporters in Bern. 'Downside risks come, of course, from potentially higher tariffs or also from the policy uncertainty in general.'
Switzerland is currently facing a 31% tariff on exports to the United States, a situation which would severely damage trade with the country's largest export market.
The GDP forecasts are adjusted for the impact of sporting events, which distorts economic data because of broadcast income for Swiss-based organisations like soccer body FIFA and the International Olympic Committee.
The predictions for both years were below the long-term average of 1.8% and followed forecast downgrades by the Swiss government and the Swiss National Bank.
Swiss National Bank denies currency manipulation after being put on U.S. watch list
SNB extended governing board member Attilio Zanetti said at the event that the central bank had reached similar conclusions to the IMF, and that there would be a significant price to pay for the world economy from higher trade barriers.
The IMF expected Swiss inflation to remain low, seeing it at 0.1% by the end of 2025 before rising to 0.6% by the end of 2026, due to low interest rates and higher oil prices.
Weaker price developments have become a concern for the SNB, which last month cut its policy interest rate to 0%, its lowest level in nearly three years.
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