Swiss Economy: Strait of Hormuz Decisive for Outlook

UBS projects Swiss GDP growth of 0.7% for 2026, cautioning that a prolonged Middle East conflict could trigger a recession if the Strait of Hormuz remains closed. Long-term labor supply remains a concern due to demographic shifts and potential population caps.

Key Takeaways

• 1.The Middle East conflict, specifically the potential closure of the Strait of Hormuz, is the primary risk factor for Swiss growth and inflation.
• 2.UBS has lowered the 2026 Swiss growth forecast to 0.7% and expects a recovery to 1.4% in 2027.
• 3.Swiss inflation is expected to remain low at 0.6%, with weak capacity utilization preventing energy-driven price hikes from broadening.

Table of Contents

• Mixed interim balance for the Swiss economy
• Manageable damage in base scenario
• Recession not yet off the table
• 10 Million Switzerland
• Global asset class preferences definitions
• Appendix

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