Economic forecast: Iran crisis clouds the outlook
Bern, 18.06.2026 — The Federal Government Expert Group on Business Cycles has revised its growth forecast for Switzerland slightly downward. GDP is now expected to increase by 0.9% in 2026 – well below the historical average – followed by 1.6% in 2027 (March forecast: 1.0% and 1.7% respectively). [1] The crisis in the Middle East is driving up energy prices and weighing on the global economy. Uncertainty remains high.
In the first quarter of 2026, Switzerland's GDP grew broadly in line with its historical average. Growth was primarily driven by the manufacturing sector, whereas domestic demand was weak. Available data and surveys suggest that GDP will continue to expand in the second quarter.
The crisis in the Middle East has led to a sharp rise in oil prices. Against this backdrop, the Expert Group has revised upward its technical assumptions for average oil prices in both 2026 and 2027. Higher energy prices are expected to lead to elevated inflation rates internationally and to a more restrictive monetary policy, particularly in European trading partner countries, thereby weighing on the global economic outlook.
In Switzerland, inflation is also projected to be slightly higher than previously expected (0.6% in both 2026 and 2027; March forecast: 0.4% and 0.5% respectively). This is weighing on private consumption. At the same time, subdued growth in global demand is dampening exports and restraining investment activity. Overall, the Expert Group has revised its Swiss growth forecast slightly downward. For 2026, it projects GDP growth of 0.9% – well below the historical average (March forecast: 1.0%).
As global demand gradually recovers, economic growth in Switzerland is projected to pick up to 1.6% in 2027. Other European countries, particularly Germany, are generally expected to recover from the current period of weakness, which will also support the Swiss economy. Increasing utilisation of production capacities is causing investment momentum to pick up moderately.
The weaker economic situation is reflected in the labour market. The unemployment rate is forecast to average 3.1% in 2026, before easing slightly to 3.0% in 2027 (March forecast: 3.0% and 2.8% respectively).
Economic risks
The future course of the crisis in the Middle East remains uncertain and continues to pose risks to the global economic outlook. A prolonged disruption to energy infrastructure or transport routes in the region could lead to stronger inflationary pressures for an extended period and necessitate a more restrictive monetary policy stance. In such a scenario, [2] the global economy would face additional headwinds, with weaker growth and higher inflation also expected in Switzerland. Conversely, the global economy could outperform projections – for instance, if oil prices decline more quickly than anticipated.
Uncertainty surrounding international trade and economic policy also persists. This forecast is based on the technical assumption that US import tariffs remain broadly at their current levels. However, changes to US customs tariffs and additional custom duties are possible, for example after the current regulation in the US expires. [3]
Other economic risks also persist. Renewed corrections on the financial markets are possible. The risks associated with global debt, particularly sovereign debt, remain high. Should any of these risks materialise, further upward pressure on the Swiss franc would be expected.
[1] The present forecast was finalised on 8 June. For further information see the accompanying SECO scenario in the economic forecast section of ‘Konjunkturtendenzen’ for summer 2026 (available in German) as well as at https://www.seco.admin.ch/en/economic-forecasts.
[2] See the accompanying SECO scenario in the economic forecast section of ‘Konjunkturtendenzen’ for summer 2026 (available in German).
[3] The existing 10% tariffs, introduced under Section 122 of the US Trade Act, may be maintained for a maximum of 150 days without congressional approval; this period expires on 24 July 2026.