{
  "title": "IMF Executive Board Concludes 2024 Article IV Consultation with Switzerland",
  "publication": "IMF News, June 24, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/06/20/pr24216-switzerland-imf-exec-board-concludes-2024-art-iv-consult",
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  "summary": "Washington, DC – June 10, 2024: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Switzerland.",
  "publishDate": "2024-06-24",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Switzerland.\n- Weak external demand and tighter financial conditions lowered growth to 0.8 percent in 2023.\n- The labor market remained resilient, although the unemployment is slowly rising from a historic low.\n- The external current account (CA) surplus declined in 2023, with lower merchanting trade and a lower services trade balance.\n- Fiscal policy has eased while maintaining a surplus.\n- Monetary policy, along with global disinflation, brought inflation back within the 0-2 percent price stability range.\n- The state-facilitated acquisition of Credit Suisse by UBS in 2023 stabilized financial markets, with limited spillovers to the financial sector and to the economy."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Growth projections:\n  - 2024: 1.3 percent (1 percent adjusted for sports events)\n  - 2025: 1.4 percent (1.7 percent adjusted for sports events)\n  - Medium-term growth: around 1.5 percent\n- Inflation: projected to remain within the price stability range, at 1.5 percent on average in 2024.\n- Current account: projected to remain broadly unchanged, reflecting a gradual recovery in external demand countered by the appreciated currency.\n- Short-term downside risks:\n  - Intensification of regional conflicts and an abrupt global slowdown, which could result in slower growth and trigger safe haven flows.\n  - Risks from the ongoing integration of CS and UBS and the large size of the combined bank.\n- Medium-term downside risks:\n  - Accelerated geoeconomic fragmentation.\n  - Possible setbacks in strengthening EU relations.\n- Policy emphasis: Commitment to free trade and global cooperation, and efforts to expand trade relations can diversify supply chains while limiting trade disruptions."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors agreed with the thrust of the staff appraisal and welcomed the Swiss economy’s strong fundamentals, resilience, and the envisaged gradual recovery.\n- Fiscal policy:\n  - The debt brake rule has anchored fiscal policy well, allowing for a substantial reduction in public debt while incorporating adequate flexibility to address shocks.\n  - Current fiscal stance considered broadly appropriate.\n  - Importance of closing structural deficits for 2026–27 and developing a comprehensive medium‑term plan to address pressures related to aging, climate change, and defense.\n  - Welcome for the recent fiscal sustainability report as a basis for formulating policy proposals.\n- Monetary policy:\n  - Directors commended the decisive actions of the Swiss National Bank (SNB) that have curbed inflation.\n  - The March rate cut was considered appropriate.\n  - Monetary policy should remain data‑dependent given uncertainty around the inflation outlook.\n  - Encouraged the SNB to gradually reduce its balance sheet while building buffers from retained earnings.\n- Financial sector:\n  - Resilience of the financial sector was welcomed, but pockets of vulnerabilities were noted, particularly related to the real estate sector.\n  - Need for strong financial sector reforms, informed by lessons from the Credit Suisse crisis.\n  - Welcome for the authorities’ review of the too‑big‑to‑fail regime.\n  - Importance of enhancing the macroprudential toolkit to address real estate risks and closing data gaps.\n  - Welcome for efforts to strengthen the AML/CFT regime and anti‑corruption frameworks.\n  - Encouragement to implement the remaining recommendations from the 2019 Financial Sector Assessment Program (FSAP); the 2025 FSAP will provide updated recommendations.\n- Structural policies:\n  - Ongoing skills gaps and demographic challenges require continued efforts to incentivize higher participation of women, older workers, and migrants, along with pension reforms.\n  - Recent progress on climate policy welcomed; additional efforts urged.\n  - Positive note on the resumption of negotiations with the EU on participation in the single market."
    },
    {
      "heading": "Financial stability and crisis lessons",
      "content": "- The state-facilitated acquisition of Credit Suisse by UBS in 2023 stabilized financial markets.\n- Directors stressed the need for strong financial sector reforms given the large size of the combined bank.\n- Continued vigilance recommended for real estate vulnerabilities.\n- Strengthening the macroprudential toolkit, closing data gaps, and completing FSAP recommendations are important priorities."
    },
    {
      "heading": "Selected economic indicators, 2021–25",
      "content": "- Population (2023): 8.815 million\n- Quota (February 2024; millions SDRs / % of total): 5,771.1 / 1.21%\n- Key export markets in 2023: Euro area (46%), US (18%)\n\n- Output\n  - Real GDP growth (%): 2021: 5.4; 2022: 2.7; 2023: 0.8; 2024: 1.3; 2025: 1.4\n- Unemployment\n  - Unemployment (%): 2021: 3.0; 2022: 2.2; 2023: 2.0; 2024: 2.3; 2025: 2.4\n- Prices\n  - Inflation (period average, %): 2021: 0.6; 2022: 2.8; 2023: 2.1; 2024: 1.5; 2025: 1.2\n- General Government Finances\n  - Revenue (% GDP): 2021: 34.2; 2022: 33.1; 2023: 32.5; 2024: 32.4; 2025: (not listed)\n  - Expenditure (% GDP): 2021: 34.5; 2022: 31.9; 2023: 32.0; 2024: 32.1; 2025: (not listed)\n  - Fiscal balance (% GDP): 2021: -0.3; 2022: 0.5; 2023: 0.2; 2024: (not listed); 2025: (not listed)\n  - Public debt (% GDP): 2021: 41.0; 2022: 37.7; 2023: 38.3; 2024: 36.7; 2025: 35.6\n- Monetary and Credit\n  - Broad money (% change): 2021: 0.1; 2022: -2.0; 2023: 2.9; 2024: 2.6; 2025: (not listed)\n  - Credit to the private sector (% change): 2021: 3.8; 2022: 1.8; 2023: (not listed)\n  - 3-month Treasury bill interest rate (%): 2021: -0.8; 2022: 0.9; 2023: 1.7; 2024: …\n- Balance of Payments\n  - Current account (% GDP): 2021: 6.9; 2022: 9.4; 2023: 7.6; 2024: 8.2\n  - Net FDI (% GDP): 2021: -1.6; 2022: 10.8; 2023: (not listed)\n- Reserves\n  - (end-of-period, billions of US dollars): 1014; 852; 724\n- External debt (% GDP): 2021: 293.3; 2022: 274.7; 2023: 241.1\n- Exchange Rates\n  - CPI-based REER (% change): 2021: -2.5; 2022: 0.3; 2023: 3.1\n\nIMF Executive Board Concludes 2024 Article IV Consultation with Switzerland (Press Release No. 24/216).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Switzerland and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/06/20/pr24216-switzerland-imf-exec-board-concludes-2024-art-iv-consult"
    }
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    "Published: June 24, 2024",
    "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Switzerland.",
    "Weak external demand and tighter financial conditions lowered growth to 0.8 percent in 2023.",
    "The labor market remained resilient, although the unemployment is slowly rising from a historic low.",
    "The external current account (CA) surplus declined in 2023, with lower merchanting trade and a lower services trade balance.",
    "Fiscal policy has eased while maintaining a surplus.",
    "Monetary policy, along with global disinflation, brought inflation back within the 0-2 percent price stability range.",
    "The state-facilitated acquisition of Credit Suisse by UBS in 2023 stabilized financial markets, with limited spillovers to the financial sector and to the economy.",
    "Growth projections:",
    "Inflation: projected to remain within the price stability range, at 1.5 percent on average in 2024.",
    "Current account: projected to remain broadly unchanged, reflecting a gradual recovery in external demand countered by the appreciated currency.",
    "Short-term downside risks:",
    "Medium-term downside risks:",
    "Policy emphasis: Commitment to free trade and global cooperation, and efforts to expand trade relations can diversify supply chains while limiting trade disruptions.",
    "Directors agreed with the thrust of the staff appraisal and welcomed the Swiss economy’s strong fundamentals, resilience, and the envisaged gradual recovery.",
    "Fiscal policy:",
    "Monetary policy:",
    "Financial sector:",
    "Structural policies:",
    "The state-facilitated acquisition of Credit Suisse by UBS in 2023 stabilized financial markets.",
    "Directors stressed the need for strong financial sector reforms given the large size of the combined bank.",
    "Continued vigilance recommended for real estate vulnerabilities.",
    "Strengthening the macroprudential toolkit, closing data gaps, and completing FSAP recommendations are important priorities.",
    "Population (2023): 8.815 million",
    "Quota (February 2024; millions SDRs / % of total): 5,771.1 / 1.21%",
    "Key export markets in 2023: Euro area (46%), US (18%)",
    "Output",
    "Unemployment",
    "Prices",
    "General Government Finances",
    "Monetary and Credit",
    "Balance of Payments",
    "Reserves",
    "External debt (% GDP): 2021: 293.3; 2022: 274.7; 2023: 241.1",
    "Exchange Rates",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Switzerland and the IMF](http://www.imf.org/external/country/CHE/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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