Moderate economic growth
The Swiss economy started 2026 on a solid growth trajectory. In the second quarter of the year, gross domestic product (adjusted for sporting events) recorded quarter-on-quarter growth of 1.5%. Growth stimuli came from the industrial sector, primarily from the chemicals and pharmaceutical industries. The services sector also grew overall. Given the backdrop of geopolitical tensions and a weak global economy, we are nonetheless expecting below-average growth of 1.2% for 2026 as a whole, a rate that should accelerate to 1.4% in 2027.
Energy prices keep inflation risks alive
Inflation in Switzerland declined in July to 0.4% – having come in at 0.5% in June – and therefore remains at a low level. However, the unceasing conflict in the Middle East is causing major fluctuations in energy markets, and there is considerable uncertainty over short-term developments as a result. The key question is whether the energy price spike will increasingly spill over to affect other goods and services, or whether it will remain restricted to individual components. In the baseline scenario, medium-term inflationary pressure can be expected to remain limited. Inflation should therefore remain within the bandwidth of price stability throughout the forecast period, and there are good reasons to expect the Swiss National Bank to retain its zero-rate policy this year.
Property prices remain buoyant
In the premium residential property segment, the low interest rate environment and scarcity of supply continue to set the trend. Moreover, the alternatives to home ownership are limited, given the tight situation in the rental housing market. Prices can therefore be expected to rise further, albeit at a less dynamic rate than witnessed in previous quarters. Investment properties likewise remain in great demand. The lack of investment alternatives is sustaining strong investor interest and strengthening their willingness to pay high prices. This can be seen in the initial yields recorded in the first half of the year, which were below their prior-year level.
Key figures at a glance
| Forecast 2026 | average of last 10 years | |
|---|---|---|
| Real GDP growth | 1.2% | 1.9% |
| Inflation | 0.5% | 0.7% |
| Unemployment rate | 3.1% | 2.7% |
| Growth in no. of households | 0.9% | 1.3% |
| New-build rate (residential) | 1.0% | 1.1% |
As of July 2026. Sources: Julius Bär, SNB, SECO, Wüest Partner, FSO