Sluggish Fourth Quarter Expansion and Prospects for Inflation in Switzerland

Swiss GDP Shows Modest Recovery in Late 2025

In the final quarter of 2025, Switzerland's real GDP grew by 0.6% on a seasonally and calendar-adjusted annualised basis, rebounding from a significant 1.8% decline in the previous quarter (refer to Graph 1). While this turnaround is a positive sign, the overall pace of growth slowed throughout the year, dropping from 2.4% in the first quarter to just 0.6% by year-end. These figures highlight ongoing challenges facing the Swiss economy.

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The steep downturn in the third quarter was largely attributed to a substantial drop in the chemicals and pharmaceuticals industry—a sector that plays a major role in Switzerland’s GDP and is particularly vulnerable to shifts in global demand and trade interruptions. The improvement seen in the fourth quarter mainly stems from this sector returning to more typical levels of activity, signalling a partial recovery.