The State Secretariat for Economic Affairs (SECO) released its GDP and inflation forecasts on Thursday. The agency downgraded its 2016 growth forecast to 1.4% from 1.5%. GDP for 2017 was downgraded to 1.8% from 1.9%.
"The strong appreciation of the Swiss franc was a main factor slowing down economic growth," the SECO said in its Spring report.
SECO expects the negative exchange rate effects to dissipate through 2016 and 2017.
The agency noted that there was "no clear sign of a marked acceleration of global growth".
The average annual unemployment rate is expected to be 3.6% this year and 3.5% next year.
The consumer price inflation is expected to be -0.6% this year, down from the December estimate of -0.1%, and 0.2% in 2017, unchanged from the December estimate.