Geneva (AFP) – Switzerland’s key economic barometer fell in August after US President Donald Trump imposed whopping tariffs on the export-reliant country, the Swiss Economic Institute (KOF) said Friday. Since the 1970s, KOF’s barometer has been the country’s chief indicator predicting how the Swiss economy is expected to perform in the near future.
“In August, the KOF Economic Barometer drops. After an increase in the previous month, the barometer decreases below its medium-term average again. The outlook for the Swiss economy is dampened,” it said in a statement. “The sub-indicators for exports and the general business situation are under particular pressure, undoubtedly also due to the new US tariffs on Swiss imports,” it added. The barometer fell by 3.9 points to 97.4.
The outlook comes the day after the government said the Swiss economy would likely grow more slowly than previously expected next year due to the massive US import tariffs. Trump blindsided Switzerland when he announced that incoming Swiss goods would be hit with a huge 39-percent tariff on August 1, one of the highest new levies he imposed on dozens of countries. Instead of 1.3 percent growth this year and 1.2 percent next year, the Swiss economy ministry’s State Secretariat for Economic Affairs is now eyeing growth of 1.2 percent in 2025 and 0.8 percent in 2026.
KOF said the indicators for manufacturing and hospitality were particularly dampened, with those negative developments slightly cushioned by the foreign demand indicators showing an improved outlook in August. “Within the producing industry (manufacturing and construction), the sub-indicators for different aspects of business activity all show negative developments,” it noted. The sub-indicators for Switzerland’s crucial chemical and pharmaceutical industries “show particularly negative developments,” it added.
Swiss businesses worry that competitors in other wealthy economies will have an edge, with the European Union and Japan having negotiated a 15-percent tariff and Britain securing a rate of 10 percent.
© 2024 AFP
