Switzerland: Private consumption is set to rebound - ING

Swiss private consumption growth is expected to have been weak in 2017 as economic uncertainties were still weighing on companies’ hiring intentions in the beginning of the year and the unemployment rate remained slightly above 3.2% in the first half of the year, points out Julien Manceaux, Senior Economist at ING.

Key Quotes

“This led to a further decline in retail sales which are back at their 2007 level. Consumer confidence was very low in 2017, at its 2009/2011 average (1.3), which explains the limited private consumption growth of the first three quarters (0.2% QoQ on average).”

“With the recovery in the industrial sector and the brightening economic outlook, unemployment should decline in 2018 (it was back at 3% already in November) and confidence should look up. We expect private consumption growth to rebound from 1.3% in 2017 to 1.6% in 2018. The trend should continue further after 2018, especially if deflationary pressures end up abating: we do not expect retail sales to deteriorate further. They have a long way to recover.”