The Swiss economy recovered slightly at the start of the year. Initial estimates by the State Secretariat for Economic Affairs (SECO) indicate growth of 0.7 percent for the first quarter, driven primarily by a stabilization in the industrial sector. Business sentiment has also improved in recent months, which points to a continuation of the recovery. Consumers, by contrast, remain significantly more cautious and are very hesitant in light of the uncertain geopolitical environment. This was reflected in stagnant consumer spending during the first quarter. On a positive note, the rise in inflation has so far been moderate by international standards. This prompted the Swiss National Bank (SNB) to leave its key interest rate unchanged at 0 percent in June.
Economy: Inflationary pressure on the rise
Despite the difficult environment, companies in many countries are still looking to the future positively. This is underpinning the short-term growth outlook for the global economy. However, the picture is clouded by the situation for consumers, whose purchasing power is being eroded by higher prices and whose sentiment remains at a very low level across the board. Another unwelcome development is that inflation rates are not only rising due to higher energy prices, but are also causing a broader upsurge in prices. With the economic outlook improving slightly, this rise looks set to gain further momentum, which is why the major central banks are increasingly under pressure to raise interest rates.
Growth, sentiment and trend
In percent
In the USA, industrial and service companies are looking to the future with greater confidence again. This should underpin their investment activity and has made a significant contribution to stabilizing the labour market. Over 500,000 new jobs were created in March and April, which is more than in 2025 as a whole. Yet, the economic situation remains fragile, as rising inflation is having a significant impact on consumers’ purchasing power without wages having kept pace. It is also concerning that the improved economic outlook increases the risk of inflation becoming entrenched. The overall rate now stands at 4.2 percent, and excluding volatile energy and food prices, inflation is rising noticeably, which could increasingly drive the US Federal Reserve (Fed) towards interest rate hikes. Nevertheless, the Fed decided in June to leave the key interest rate unchanged for the time being.
Growth, sentiment and trend
In percent
The eurozone is one of the currency areas where the dampening effects of the Iran war have been most noticeable so far. Sentiment among consumers and service providers has deteriorated substantially, and consumer activity has weakened considerably. The industrial sector is currently somewhat more robust, although this is likely to be at least partly due to pull-forward effects, as companies anticipate potential future price rises. Overall, it means the outlook for growth remains very limited. At the same time, inflation has risen sharply recently – with an overall rate of 3.2 percent and a core rate of 2.5 percent. Against this backdrop, the European Central Bank (ECB) raised its policy rates in June, bringing the main refinancing rate to 2.4 percent.
Growth, sentiment and trend
In percent
The economic impact of the blockade of the Strait of Hormuz on Asia’s major emerging economies remains difficult to assess. While many countries report supply shortages and rationing, this is only marginally reflected in the available economic indicators so far. However, it seems inevitable that the effects will have a significant impact on the global economy, as the Asian emerging markets have been one of the most important growth drivers of the global economy in recent years. What’s also striking is that China, the largest emerging market economy, is still experiencing a severe downturn. The latest figures were once again disappointing, investment activity is now declining and consumption is no longer growing.
Growth, sentiment and trend
In percent
Global economic data
| Indicators | Switzerland | USA | Eurozone | UK | Japan | India | Brazil | China |
|---|---|---|---|---|---|---|---|---|
| Indicators GDP Y/Y 2026Q1 |
Switzerland 0.5% |
USA 2.6% |
Eurozone 0.3% |
UK 1.1% |
Japan 0.4% |
India 7.8% |
Brazil 1.8% |
China 5.0% |
| Indicators GDP Y/Y 2025Q4 |
Switzerland 1.0% |
USA 2.0% |
Eurozone 1.2% |
UK 1.0% |
Japan 0.3% |
India 8.0% |
Brazil 1.8% |
China 4.5% |
| Indicators Economic climate |
Switzerland = |
USA – |
Eurozone – |
UK – |
Japan + |
India – |
Brazil – |
China + |
| Indicators Trend growth |
Switzerland 1.2% |
USA 1.7% |
Eurozone 0.8% |
UK 1.8% |
Japan 1.1% |
India 5.3% |
Brazil 2.0% |
China 3.6% |
| Indicators Inflation |
Switzerland 0.6% |
USA 4.2% |
Eurozone 3.2% |
UK 2.8% |
Japan 1.4% |
India 3.5% |
Brazil 4.4% |
China 1.2% |
| Indicators Policy rates |
Switzerland 0.0% |
USA 3.75% |
Eurozone 2.4% |
UK 3.75% |
Japan 1.0% |
India 5.25% |
Brazil 14.25% |
China 3.0% |
Source: Bloomberg