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Swiss Govt Forecasts 'well below Average' Growth in 2024

ZURICH, Dec 13 (Reuters) - The Swiss economy will grow "well below average" in 2024, the government said on Wednesday, citing potential economic risks such as a slowdown in Germany and China and higher interest rates dampening demand for Swiss products.

The wealthy country's economy will expand by 1.1% next year, the State Secretariat for Economic Affairs (SECO) said, a reduction from its September forecast for growth of 1.2%.

Average growth has been 1.8% in recent years.

"The expert group expects economic growth in Switzerland to be well below average in 2024," SECO said.

It said the subdued development in the euro zone, Switzerland's biggest export market, would weigh on the economy.

"German industry could slow down more significantly and weaken the exposed areas of the Swiss economy more than expected," SECO said.

Geopolitical risks have also increased, SECO said, citing the conflict in the Middle East, which could be accompanied by rising oil prices triggering higher inflation.

This could be countered by central banks raising interest rates, a scenario which would reduce higher global demand, SECO said.

SECO kept its forecast of 1.3% GDP growth for 2023, and said it expected growth to be 1.7% in 2025, its first forecast for the year.

The forecasts remove the effect of broadcasting income from events organised by sporting organisations like soccer body FIFA and the International Olympic Committee, which are based in Switzerland but whose income does not reflect economic activity in the country.

SECO said it expected Swiss inflation to be to 2.1% in 2023, from the previously forecast 2.2%. It also expects inflation to decline to 1.9% in 2024 and fall to 1.1% in 2025.

The expected downturn in inflation will be welcomed by the Swiss National Bank, which is due to give its latest interest rates decision on Thursday.

The central bank is expected by economists to pause its recent rate hikes, introduced to check rising prices. The SNB will also give its latest economic forecasts.

Reporting by John Revill, editing by Rachel More and Nick Macfie

Source: Reuters

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