The State Secretariat for Economic Affairs or SECO maintained its Swiss growth outlook for 2016, and forecast inflation to return to positive territory only in 2017.
In the winter forecast released Thursday, the expert group projected gross domestic product to expand 1.5 percent next year, unchanged from prior estimate. Meanwhile, the outlook for 2015 was lowered slightly to 0.8 percent from 0.9 percent.
Given that the international economy should improve gradually, the expert group anticipates an increase in domestic growth. GDP is expected to rise further to 1.9 percent in 2017.
GDP forecast implies a hesitant return to a normalization of economic activity over the next two years and the presence of some long-lasting effects of the Swiss franc appreciation.
The slow pace of the economic recovery is also likely to continue hampering the labor market in the coming quarters, the agency said.
The unemployment rate is expected to rise to 3.6 percent in 2016 from 3.3 percent in 2015. The rates for both 2015 and 2016 were left unrevised.
Inflation is likely to follow a negative trend until the effects of the appreciation in the value of the Swiss franc and lower oil prices fully vanish. The inflation forecast for 2015 was retained at -1.1 percent.
Consumer prices are forecast to fall 0.1 percent on a yearly basis in 2016 instead of a 0.1 percent rise estimated in September. Prices are forecast to grow 0.2 percent in 2017.
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