Nordic & Swiss

Nordic & Swiss Economic Outlook

Nordic & Swiss Economic Outlook

Well placed to navigate choppy waters

As highly-open economies, Switzerland and the Nordics are far from immune to the issues of slowing global growth and supply-chain shortages that are currently vexing investors. Sweden is perhaps most exposed; the impressive rebound there looks to have peaked in July and momentum will fade in H2 2021.

20 October 2021

Nordic & Swiss Economic Outlook

Post-pandemic recovery phase drawing to a close

As elsewhere in mainland Europe, activity in Switzerland and the Nordic economies rebounded in Q2 as services sectors re-opened and the strength of global trade has buoyed exports. Our GDP forecasts for 2021 are generally above the consensus and output will get back to pre-virus levels in all cases by the end of the summer. The spread of the Delta variant is a risk but with vaccination programmes powering ahead we do not expect it to prevent output from rising closer to pre-pandemic trends in H2, particularly in Denmark.

22 July 2021

Nordic & Swiss Economic Outlook

Still running ahead of the pack

As elsewhere in mainland Europe, the slow vaccine rollout means that the rebound in domestic activity is unlikely to get underway in earnest until Q3. Denmark is a noteworthy exception; its comparative success in containing the virus has allowed it to start to ease restrictions already. While the decision to discontinue use of the AstraZeneca jab means it may have to tread a bit more carefully from here, our 2021 GDP forecast is above the consensus. More generally, having experienced some of the smallest falls in output in Europe in 2020, GDP in Switzerland and the Nordics will get back to pre-virus levels in H2 2021 – about a year ahead of the euro-zone.

16 April 2021
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Nordic & Swiss Economic Outlook

At the front of the pack

Having experienced some of the smallest falls in output in Europe in 2020, GDP in Switzerland and the Nordics is likely to rise back to pre-virus levels in H2 2021 – about a year ahead of the euro-zone.

Nordic & Swiss Economic Outlook

Not immune, but comparatively resilient

Having outperformed in H1, the Nordic economies are set for some of the smallest falls in output in Europe this year. Of course, the virus is the key uncertainty for the outlook, but it is encouraging that Denmark’s second wave already looks to have peaked and Norway and Sweden have so far side-stepped the scale of renewed cases seen in the worst-hit countries. In the absence of a drastic tightening of restrictions, GDP in the Nordics should be close to pre-virus levels by the end of 2021 – about a year ahead of the euro-zone.

Nordic & Swiss Economic Outlook

Nordics set for shallowest recessions in Europe

The Nordic economies have weathered the Covid crisis comparatively well, and if our above-consensus forecasts for GDP growth this year prove accurate, the region will see some of the smallest falls in output in the whole of Europe. We forecast output in Denmark and Norway to fall by about 3% this year, and while Sweden has not been unscathed, despite its light-touch lockdown, the fact that the economy grew in Q1 sets the stage for an even smaller contraction. Switzerland has been hit harder, but it is facing a comparatively modest downturn by European standards, more akin to that in Germany than the worst-affected countries.

21 July 2020

Nordic & Swiss Economic Outlook

Comparatively well placed to weather the carnage

Low levels of government debt mean that Switzerland and the Nordic economies are comparatively well placed to withstand the acute stresses being placed on the public finances – particularly compared to the euro-zone. That said, output everywhere will take years to return to its pre-virus peak, and the level of GDP at end-2022 will be between 4% and 8% below where it would have been in absence of the Covid-19.

Nordic & Swiss Economic Outlook

Policymakers to follow the ECB down

We think growth and inflation will be below consensus in Switzerland and the Nordics this year. Switzerland is most exposed to the prolonged manufacturing recession in Germany and inflation there is likely to be close to zero. Meanwhile, we think the Swedish economy will struggle to gain any momentum, causing inflation to undershoot the Riksbank’s target.

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