Switzerland enters recession with historic drop in GDP in Q2

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ZURICH | Switzerland entered recession after two successive quarters of decline in gross domestic product (GDP), and a “historic” decline of 8.2% in the second quarter compared to the previous one, due to the health crisis.

In the first quarter, GDP had already fallen by 2.5% compared to the previous quarter, the State Secretariat for Economic Affairs (Seco) said on Thursday in a press release, which slightly revised its initial estimate upwards. He had previously estimated the drop in activity at 2.6%.

“In the second quarter, the GDP of Switzerland suffered the largest decline since the beginning of the recording of the quarterly figures in 1980”, specified the Seco, stressing however that this decline remained “relatively limited” compared to other countries.

The pharmaceutical sector, which weighs the heaviest in the trade balance, has made it possible to put the brakes on the marked decline in other parts of the Swiss economy that are much more sensitive to the economic situation, such as machines and watchmaking which “have severely affected by the international economic crisis, ”Seco said.

During this quarter, merchandise exports (excluding gold, precious stones and metals, works of art and antiques) fell 9.4%.

With the implementation of measures to fight the pandemic, the sector most affected was that of services. The added value in the hotel and catering industry plummeted by 54.2% and by 21.7% in transport and communications.

Health measures also weighed heavily on household spending, down 8.6%, with the closure of stores.

“Final domestic demand has thus recorded a historic decline”, added Seco, “with the corollary” of a sharp drop in imports of goods, down 14.3%, as well as services, which themselves, collapsed by 22.2%.

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