Economy – KOF Economic Forecast, summer 2025: Swiss economy hit by international trade conflict

Data revisions last year mean that KOF is sticking to its forecast of real, sport-adjusted GDP growth of 1.4 per cent for 2025 (1.0 per cent unadjusted) despite a deterioration in its assessment. Its GDP growth forecast for 2026, however, has been lowered by 0.4 percentage points to 1.5 per cent (1.9 per cent unadjusted).

The international trade conflict is more pronounced than was expected in the spring and is triggering a more marked deterioration in economic projections. 

The latest KOF forecast is based on the assumption that the tariffs on exports to the United States in force at the beginning of June and the corresponding countermeasures will remain in place throughout the entire forecast period. This equates to a flat-rate 10 per cent tariff on most imports to the US with the exception of pharmaceutical products for the most part.

Companies fast-track exports to the US; countervailing trend likely to follow

The great uncertainty about the future of the United States' trade policy and the announcement of tariff increases imposed on countries around the world have prompted firms to bring forward their production and exports of goods to the United States as much as possible. This yielded stellar growth in global trade in the first quarter and strong GDP growth in exportled countries such as Germany. In contrast, the disproportionately high growth in imports in the United States resulted in a negative quarter. Short-term demand for foreign goods displaced that for domestic goods and thus had an adverse impact on output in the US. Countervailing tr