Due to the easing of the Corona measures at the beginning of March, the domestic economy has started to recover. Industrial production also grew strongly due to increased demand from key trading partners. The consumer sector in particular, which was severely constrained by the pandemic, is expected to recover strongly. In addition, the situation for the hospitality and event industry is expected to normalise. In mid-March 2021, the Confederation's experts were predicting economic growth of +3.0 % for 2021. Three months later, in mid-June, the forecast was increased by 0.6 % to +3.6 %, which would be an above-average growth compared to past years.
For 2022, GDP growth is expected to continue. The experts expect a sports event-adjusted GDP of +3.3 %. The reason is that foreign trade should continue to provide substantial growth. Furthermore, the unemployment rate is expected to decline to an annual average of 2.8 %.
SECO adds three scenarios to the forecast due to the volatile situation.
There could be second-round economic effects, such as an increased number of bankruptcies or layoffs. This would lead to a weaker recovery in demand. In general, the recovery in this scenario would be slower than currently predicted.
A stronger recovery than the experts predict could also occur. This is especially true for private consumption. A number of households was able to increase savings last year and part of it could now be used for additional spending.
If strong demand is accompanied by a shortage of supply in the longer term, this could lead to increased inflation. If interest rates are raised due to increased inflation, this could dampen the recovery. At present, however, an increase in interest rates is not expected due to the high level of debt.
Although there are also risks that could dampen the estimated developments, these improved forecasts by the experts are a positive signal for the future.