IMF Executive Board Concludes 2025 Article IV Consultation with Switzerland
IMF News, September 16, 2025
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- Published: September 16, 2025
Growth outlook and risks
- Growth is projected to gradually converge to potential by 2028.
- Near-term performance constrained by global trade tensions and uncertainty.
- Downside risks:
- Potential escalation of trade tensions.
- Volatile energy markets.
- Intensified safe-haven flows that could challenge Switzerland's export-oriented growth model.
- Upside possibility:
- Continued discussions with the U.S. may lead to lower tariffs and higher growth.
Monetary policy
- The SNB's policy rate cut to zero was warranted given low inflation and weakening labor market conditions.
- Limited space for further policy easing implies:
- Need to cautiously calibrate use of available policy tools.
- Manage expectations through careful communication amid heightened uncertainty.
- Executive Directors:
- Agreed recent monetary policy easing was warranted given economic slack and disinflationary pressures.
- Emphasized additional policy rate cuts below zero should carefully weigh financial stability risks, including weaker bank profitability and elevated real estate exposures.
- Noted the SNB’s monetary policy framework has served the country well but could benefit from a review, including communication tools and risk scenarios.
Fiscal policy and medium-term fiscal strategy
- The moderately expansionary fiscal stance for 2025 is generally considered appropriate given moderate economic slack.
- Fiscal challenges and pressures:
- Demographic pressures.
- Climate commitments.
- Defense needs.
- Pension reforms.
- Recommendations:
- Develop a comprehensive medium-term fiscal strategy that reconciles the constraints of the debt‑brake rule with mounting medium-to-long term expenditure demands.
- Maintain flexibility within the debt‑brake to avoid procyclical fiscal tightening if adverse shocks materialize.
- Pursue expenditure‑rationalization and revenue‑mobilization measures.
- Continue tax reform efforts and consider broadening the tax base.
- Review spending responsibilities across government levels.
- A few Directors called for a more expansionary stance to address growth challenges, deflation risks, and reduce current account surpluses.
Financial sector stability and reforms
- The Credit Suisse crisis catalyzed crucial reforms to Switzerland's Too-Big-To-Fail framework.
- 2025 FSAP findings:
- Financial system is resilient.
- Vulnerabilities from real estate exposures and low interest rates noted.
- Required actions and recommendations:
- Comprehensive implementation of enhanced supervisory powers.
- Expand macroprudential tools to address real estate risks.
- Strengthen the financial safety net to match the complexity of Switzerland's globally significant financial sector.
- Swift implementation of measures to strengthen FINMA’s supervisory powers and capacity, enhance crisis preparedness, and broaden the macroprudential toolkit.
- Encourage a more proactive supervisory approach.
- Continue vigilance on AML/CFT and cyber risks.
Structural competitiveness and productivity
- Switzerland’s structural competitiveness remains strong, but productivity gaps persist, particularly among smaller firms and in services.
- Contributing factors to productivity gaps:
- Issues of access to finance.
- Constrained R&D.
- A small domestic market.
- Regulatory frictions.
- Policy recommendations:
- Reduce administrative barriers.
- Enhance R&D access.
- Secure stable market access to maintain resilience against rising geo-economic fragmentation.
- Streamline business procedures, enhance competition, and improve SME financing.
- Implement reforms to the Cartel Act and Vocational Training Act effectively.
Executive Board Assessment (summary of Directors’ views)
- Commended Switzerland’s strong economic fundamentals: robust institutions, prudent policies, and a skilled labor force supporting resilience and macroeconomic stability.
- Noted challenges from trade fragmentation, higher external tariffs, and safe‑haven flows; supported continued prudent policies.
- Welcomed authorities’ engagement with key external partners to preserve market access and commended continued support for multilateralism and a rules‑based international environment.
- Views on fiscal stance: generally appropriate for 2025, with some Directors preferring a more expansionary approach.
- Views on monetary policy: easing warranted but further cuts below zero entail financial stability trade-offs.
- Views on financial sector: welcomed FSAP findings and authorities’ proposed reforms; supported swift implementation and proactive supervision.
- Views on structural reforms: encouraged policies to address productivity gaps and support SMEs.
Key statistics (selected figures from Table 1)
- Real GDP (Percent Change) — Staff projections:
- 2024: 0.7
- 2025: 0.9
- 2026: 1.3
- 2027: 1.1
- 2028: 1.8
- Real GDP (adj. for sporting events):
- 2018: 2.5
- 2019: 1.5
- 2020: -2.2
- 2021: 5.3
- 2022: 1.0
- Nominal GDP (billions of Swiss francs):
- 2018: 709.8
- 2019: 717.3
- 2020: 696.1
- 2021: 744.5
- 2022: 791.1
- 2023: 804.0
- 2024: 825.6
- 2025: 834.5
- 2026: 850.2
- 2027: 865.6
- 2028: 887.2
- 2029: 903.9
- 2030: 926.3
- Gross national saving (Percent of GDP):
- 2018: 31.3
- 2019: 29.9
- 2020: 30.1
- 2021: 33.4
- 2022: 33.6
- 2023: 31.2
- 2024: 32.0
- 2025: 30.7
- 2026: 31.8
- 2027: 32.2
- 2028: 33.0
- Gross domestic investment (Percent of GDP):
- 2018: 25.7
- 2019: 26.4
- 2020: 29.6
- 2021: 24.8
- 2022: 25.9
- 2023: 26.9
- 2024: 26.1
- 2025: 26.5
- 2026: 26.6
- 2027: 27.0
- 2028: 27.1
- Current account balance (Percent of GDP):
- 2018: 3.5
- 2019: 7.0
- 2020: 8.7
- 2021: 5.1
- 2022: 5.0
- 2023: 6.0
- 2024: 6.3
- General Government Finances (Percent of GDP):
- Revenue (recent years): 33.3; 34.0; 34.1; 32.7; 32.5; 32.3
- Expenditure (recent years): 37.0; 34.4; 31.6; 32.1; 31.9
- Balance: -3.0
- Cyclically adjusted balance: -2.5
- Gross debt 3/:
- 2018: 39.8
- 2019: 39.7
- 2020: 43.2
- 2021: 40.9
- 2022: 37.2
- 2023: 38.7
- 2024: 37.5
- 2025: 36.9
- 2026: 36.1
- 2027: 35.3
- 2028: 34.3
- Capacity utilization:
- 2018: 73.8
- 2019: 74.6
- 2020: 71.7
- 2021: 76.3
- 2022: 77.7
- 2023: 77.3
- Nominal effective rate (avg., 2000=100):
- 2018: 120.4
- 2019: 123.2
- 2020: 130.2
- 2021: 129.9
- 2022: 135.9
- 2023: 144.5
- 2024: 149.0
- 2025: 149.0 (table shows 149.0 for 2024 and 149.0 for 2025)
- Real effective rate (avg., 2000=100):
- 2018: 103.2
- 2019: 104.2
- 2020: 108.2
- 2021: 105.5
- 2022: 105.9
- 2023: 109.3
- 2024: 110.8
Executive Board of the International Monetary Fund, September 10, 2025.