Hit By COVID-19, Switzerland Plunges Into ‘Historic’ Recession
Switzerland has plunged into recession after the coronavirus pandemic caused a “historic” 8.2-percent slump in economic activity in the second quarter, official figures showed Thursday.
“In the second quarter, Switzerland’s GDP (gross domestic product) suffered the biggest decline since records of quarterly data began in 1980,” the economic affairs ministry (SECO) said in a statement.
During the first quarter, the wealthy Alpine nation’s economy shrank 2.5 percent compared to the previous quarter, it said, revising the figure slightly from the 2.6 percent announced in June.
Recession is defined as two consecutive quarters of contraction.
SECO pointed out that Switzerland was by no way unique, with the global economy also in sharp recession as the pandemic rages worldwide.
To date, more than 820,000 people have died out of the some 24 million infected globally by the novel coronavirus.
SECO stressed that in Switzerland, which has seen over 1,700 deaths and more than 40,000 cases, the “GDP decline remained limited in an international comparison.”
During the second quarter, Switzerland saw manufacturing slump nine percent, with growth in the country’s sizeable pharmaceutical industry preventing a steeper decline.
Exports of goods, excluding precious metals and other valuables, plunged 9.4 percent.
Switzerland’s service sector was meanwhile hit hardest by the measures taken to contain the pandemic, it said, with accommodation and food services for example plummeting over 54 percent.
SECO pointed out that tourism-related services had a smaller share of GDP than in most neighbouring nations.
But internally, the measures, which shuttered shops and restaurants, hit private consumption hard, pushing it down 8.6 percent.
Overall, SECO said, domestic demand recorded a “historic decline”, with imports of goods falling 14.3 percent and services more than 22 percent.