ZURICH, June 19 (Reuters) - The Swiss government kept its upbeat assessment for the country’s economic development over the next two years, but warned on Tuesday that global economic risks have increased.
The State Secretariat for Economic Affairs (SECO) said it expected economic growth of 2.4 percent in 2018, the same level as its previous forecast in March.
It also retained its forecast for Swiss GDP to grow by 2.0 percent in 2019. Both figures were faster than the long-term average for the Swiss GDP growth rate of 1.7 percent.
“While the booming global economy and favourable trend in exchange rates are boosting demand for Swiss products, growth is also gaining increasing momentum from the domestic economy,” the government’s expert group said.
The recovery of the Swiss domestic market is particularly important, with the government warning of weakening impetus from international trade.
The government said global economic risks had increased in recent months, an important consideration for Switzerland where exports generate roughly two-thirds of GDP.
Risks highlighted included the trade dispute launched by the U.S. over steel and aluminium imports.
“If the situation were to deteriorate further and trigger a trade war between the major economic areas, this would significantly curb global trade, Swiss exports and, ultimately, economic growth in the medium term,” the government said.
Increasing political uncertainty in Italy could also cause turbulence on financial markets and trigger “considerable upwards pressure on the Swiss franc, bringing with it considerable repercussions for the Swiss economy”, it added.
Reporting by John Revill; Editing by Michael Shields