Moderate growth in an uncertain environment
Despite the fraught geopolitical situation, the Swiss economy is continuing to grow in 2026, albeit only modestly. For the year as a whole, gross domestic product is expected to rise by 1.2%, a rate that would once again lag behind the long-term average. A slight upturn is expected in the second half of the year in particular. Further growth stimuli here include not just domestic consumption but increasingly also construction sector activity. Given the volatile situation in the Middle East, however, the cautiously positive outlook is overshadowed by heightened uncertainty.
Inflation low despite higher energy prices
Swiss inflation remains at a low level and amounted to just 0.6% in April 2026. Although rising energy prices have been a source of slight upward pressure recently, overall inflationary pressure remains subdued. In particular, the appreciation of the Swiss franc is acting as a restraining force on the price development of imported goods (excluding energy) and is therefore doing its bit to keep inflation at a low level. Between December 2025 and March 2026, the Swiss currency appreciated in real terms by 2.2% against the euro and by 1.3% against the broader overall currency index of the SNB.
For the guardians of Swiss monetary policy, the latest rise in energy prices is less relevant than the question of whether this is feeding through into inflationary expectations. In our baseline scenario, we assume that inflation will remain within the Swiss National Bank’s target bandwidth of 0.0 to 2.0%, which supports maintaining the current monetary policy.
Robust demand meets scarce supply
The current market environment is favourable for real estate investments despite the ongoing geopolitical uncertainties. Low interest rates and a lack of investment alternatives are resulting in persistently strong capital inflows into the Swiss property market. The high current level of demand stands in contrast to a scarcity of supply. Against this backdrop, further price rises can be expected in both the upmarket owner-occupied housing segment and residential investment properties.
Key figures at a glance
| Forecast 2026 | average of last 10 years | |
|---|---|---|
| Real GDP growth | 1.2% | 1.8% |
| Inflation | 0.6% | 0.7% |
| Unemployment rate | 3.0% | 2.7% |
| Growth in no. of households | 0.7% | 1.3% |
| New-build rate (residential) | 1.0% | 1.1% |
As of April 2026. Sources: Julius Baer, SNB, SECO, Wüest Partner, FSO