While exports, industrial production and investments are expected to decrease year-on-year in 2015, private consumption is expected to rise 1.1% in 2015.
The insolvency environment
The number of corporate insolvencies remains high in 2015
Swiss business insolvencies decreased 7% in 2014. However, due to the more difficult economic environment it is expected that this improvement will not continue in 2015. With 6,040 cases in 2014 the number of business failures was still about 1,800 cases higher than in 2008.
Economic situation
Slowdown of growth
Swiss economic growth is expected to stagnate in 2015 mainly due to the decision of the Swiss National Bank to abandon the ceiling of the franc against the euro on January 15, 2015. Since then, export-oriented Swiss businesses have been negatively affected by the sharp appreciation of the franc against the euro, as their domestic production costs have risen relative to their export prices, squeezing profit levels. Switzerland relies heavily on exports, which account for 70% of GDP. Tourism is also negatively affected.
While exports, industrial production and investments are expected to decrease year-on-year in 2015, private consumption is expected to rise 1.1% in 2015.
Household consumption is helped by decreasing consumer prices and cheaper imports. However, a persistently strong franc raises the chance of prolonged deflation, and consumer prices are expected to decrease in 2015 and 2016. Entrenched deflation poses the risk that households postpone consumption and businesses delay investments, expecting prices to decrease further. This would undermine overall economic growth.
