The Swiss government revised down its economic growth expectation for 2026 on Wednesday, lowering the forecast to 1% from the 1.1% projected in December. The move reflects heightened uncertainty related to the Middle East conflict and the economic ripple effects associated with it.
Officials left the 2027 growth outlook unchanged at 1.7%.
An expert group operating under the State Secretariat for Economic Affairs (SECO) identified the ongoing conflict in the Middle East as a source of considerable uncertainty for the Swiss economy. The group specifically pointed to higher oil prices that have resulted from the situation abroad.
As a consequence of rising energy costs, the SECO expert group raised its inflation forecast for 2026 to 0.4% - double the 0.2% estimate published in December. The group also signalled an expectation of slightly weaker private consumption within Switzerland.
Those adjustments - a lower growth projection and a higher inflation estimate - reflect the narrow set of changes described by the expert group. The government retained its view for the following year, keeping the 2027 growth projection at 1.7% without revision.
Context and implications
While the official projections are modestly altered, the SECO expert group's analysis centers on two linked developments contained in its review: international conflict-driven volatility in energy markets, and a corresponding, if limited, drag on domestic spending. The forecast changes announced are calibrated - a 0.1 percentage point reduction in 2026 growth and a 0.2 percentage point increase in the 2026 inflation forecast - reflecting the group's assessment of the current risks rather than a broader overhaul of the medium-term outlook.
The group's expectation of slightly weaker private consumption was included as part of the same assessment of external pressures and their transmission to the domestic economy.
Bottom line
The government's latest projections show a modestly weaker growth path for 2026 and a small uptick in 2026 inflation, both tied in the official analysis to uncertainty stemming from the Middle East conflict and related upward pressure on oil prices. The 2027 growth estimate remains at 1.7%, unchanged by the current update.