Swiss Economy Expands at Fastest Pace in Nearly Five Years

Switzerland’s economy grew 1.5% in the second quarter of 2026, accelerating from 0.5% in the previous quarter and matching preliminary estimates. It was the strongest quarterly growth since Q3 2021, driven by a 10.5% surge in the chemical and pharmaceutical industry as exports and sales rebounded. Goods exports rose 5.5%, while the broader manufacturing sector grew 0.7%. Services output increased 0.7%, supported by transport (+1.9%), communications (+1.1%) and financial services (+1.9%), while services exports climbed 1.6%. Domestic demand also recovered, rising 0.5% after a weak start to the year. Private consumption increased 0.3%, driven by higher spending on healthcare, food, restaurants and accommodation, while government consumption (+0.4%) and investment also contributed positively to growth.

Switzerland's economy expanded by 1.5% quarter-on-quarter in the three months to June 2026, accelerating sharply from 0.4% growth in the previous period, according to flash estimates. The reading marked the strongest quarterly expansion since the third quarter of 2021, underscoring the country's ability to withstand headwinds, including elevated energy costs linked to Middle East tensions and persistent trade uncertainty. The latter stems from the absence of a legally binding trade agreement with the US, even after Switzerland secured a preliminary deal last November that capped tariffs at 15%. Growth was driven primarily by the industrial sector, with the chemical and pharmaceutical industry providing the largest boost to economic activity. The services sector also expanded, further supporting the broad-based improvement in output.

Switzerland’s gross domestic product expanded 0.4% quarter-on-quarter in the three months to March 2026, less than initial estimates of 0.5%. Industrial output increased 1.3%, led by manufacturing (+1.5%). On the other hand, the chemical and pharmaceutical industry contracted (-3.4%) as exports of these products fell sharply, contributing to a 2.2% decline in overall goods exports. Services grew just 0.2%, with mixed performance across sectors. Transport (+1.9%) and financial services (+1.3%) supported growth, helped by stronger interest and commission income. In contrast, trade fell 0.8%, including a 1.3% decline in retail activity. Accommodation and food services also weakened (-0.6%) due to fewer overnight stays. Services exports rose only 0.5%. Domestic final demand increased just 0.1%. Government spending grew strongly (+0.9%), but both equipment investment (-0.2%) and construction investment (-0.2%) declined. Imports fell 2.4%, reflecting weak domestic demand.