KOF Institute raises Swiss growth forecast to 1.9% for 2026

Economists at ETH Zurich's KOF Institute sharply upward-revised their 2026 growth forecast, citing stronger-than-expected Q2 data and global resilience despite tariff and energy risks.

The KOF Institute at ETH Zurich has raised its 2026 GDP growth forecast for Switzerland to 1.9%, excluding international sporting events, up from just 0.8% projected in summer. The revision reflects surprisingly robust economic performance in the first half of 2026, particularly in the second quarter, and upward revisions to the national accounts that paint a more favorable picture of recent economic developments. The institute also raised its 2027 forecast to 1.7% (from 1.5%) and projects 1.7% growth for 2028. This follows the Swiss federal government's own upward revision to 1.7% growth for 2026 announced in mid-September. Despite US tariff policy uncertainty, Middle East tensions, and rising bond yields, the KOF economists note that the global economy has proven more resilient than expected. The labour market presents a mixed picture, though rising employment is expected amid the stronger growth outlook. Low inflation of 0.6% is forecast for 2026 and 2027.

How could this affect you

Traced by who's actually in the path of this — not everyone is.

Likely

Swiss exporters and asset managers

Stronger growth forecast could support corporate earnings, commodity demand, and equity valuations; weaker franc aids export competitiveness. However, tariff and energy risks remain.

Likely

Swiss workers and job seekers

Revised upward growth forecasts suggest stronger labour demand; unemployment is expected to remain low (3.1% in 2026, 3% in 2027), supporting wage growth.

Possible

Fixed-income investors

Higher growth could eventually support SNB rate-hike expectations or dampen further cuts, affecting Swiss bonds and the franc. Current inflation expectations (0.6%) remain low, limiting near-term pressure.

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🌐 Switzerland

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The KOF upgrade signals growing confidence that the Swiss economy can absorb external shocks—tariff policy, Middle East energy costs, geopolitical risk—better than feared. The strategy is implicit: emphasize resilience and data-driven forecasting to manage investor and business sentiment. This counters earlier doom-forecasting (0.8% in summer) and reinforces narratives around Switzerland's structural strengths (low energy dependency, stable labour market, strong services sector). The main risk: if the underlying data (Q2 momentum, revised accounts) proves driven by temporary factors like pharmaceutical exports volatility, the growth narrative could reverse sharply. Competitors would be economists revising downward again if external shocks (Middle East escalation, US tariff escalation) materialize faster than priced in.