How the strong withstand blows: Pandemic shakes even the Swiss economy

(Patria) - The coronavirus pandemic has caused damage even to the strongest economies like Switzerland.

The country's government estimates that the economy there will face the biggest decline in decades, as containment measures have led to a drastic reduction in production and job losses, although the negative outcome will still be less than expected.

The Swiss GDP will decrease by 6.2% this year, which represents the largest drop since 1975, when the country was hit by the consequences of oil price fluctuations.

Unemployment is also predicted to rise to 3.8%, which is a high percentage by Swiss standards, along with a decline in foreign trade, purchasing power, and a slower return of companies to their usual pace of work.

However, recent forecasts are slightly better than the initially predicted GDP drop of 6.7% as projected by government economists in April, and also in comparison to other European countries.

The Organisation for Economic Co-operation and Development (OECD) predicted that Great Britain could face a decline of 11.5%, and similarly for France (11.4%) and Italy (11.3%).

In the event that a second wave of the epidemic, which would bring restrictive measures, does not occur, the Swiss government expects a gradual recovery in the second half of the year.

'Compared to other countries, the Swiss economy has proven to be quite resilient,' claims Gero Jung, chief economist at Mirabaud Bank, explaining that Switzerland responded to the crisis very quickly with a 'massive' government stimulus of over 60 billion francs ($63.22 billion) or about 10% of GDP.

More than 15 billion Swiss francs in emergency aid was received by about 130,000 domestic businesses. Around 1.9 million people, or 37% of the workforce, applied for short-term financial assistance.

The emergency measures introduced in Switzerland were somewhat milder than in other countries, while the large pharmaceutical sector continued production at the same pace.