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Industry, Services Drive Switzerland's First-quarter GDP Growth; Unemployment Up

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Industry, Services Drive Switzerland's First-quarter GDP Growth; Unemployment Up

Switzerland's economic expansion picked up in the first three months of 2026 amid growth observed in both the industrial and services sectors.

Switzerland's seasonally and sporting event-adjusted gross domestic product edged up 0.5% in the first quarter, according to provisional data from the State Secretariat for Economic Affairs published Monday. The reading, which follows a 0.2% rise in the previous three-month period, marks the second straight quarter of recovery following a brief, US tariff-induced contraction in the third quarter of 2025.

In a separate same-day release, the Federal Statistical Office said Swiss employment ticked up by 0.2% year-over-year in the first quarter of 2026. In the final three months of 2025, Swiss employment was up 0.1%.

Meanwhile, the nation's unemployment rate, as defined by the International Labour Organization, rose to 5.2% from 4.7% during the same period last year. Conversely, Switzerland's seasonally adjusted quarterly unemployment rate saw a minor improvement to 5% from 5.1% previously.

In an economic forecast report published March 18, 2026, the KOF Swiss Economic Institute projected the country's real GDP growth, adjusted for major sporting events, to grow by 1% in 2026 and 1.7% in 2027. The forecast accounts for the shifting US trade policies and the ongoing conflict in the Middle East, which KOF noted faced "substantial" downside-skewed risks. Should war-driven oil prices remain 30% higher on a sustained basis, economic growth is projected to decelerate to 0.7% in 2026 and 1.5% in 2027.

"Against this backdrop, Swiss output is expected to remain below potential for the time being. Private consumption remains a key pillar. It has recently been robust and is expected to stay resilient over the forecast period, supported by low inflation and stable wage growth despite a weaker labour market. Government consumption, by contrast, is likely to increase only moderately. The federal government's planned consolidation measures under the 2027 budget relief package will weigh on growth," KOF said.

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