Economy slips into contraction in the third quarter of 2025

GDP reading: Switzerland's GDP was down 0.5% in seasonally adjusted quarter-on-quarter terms in Q3, following a 0.2% expansion in the previous quarter. Q3's reading was the weakest since Q2 2020, at the height of the Covid-19 pandemic. A sharp drop in the important chemical and pharmaceutical sector following export front-loading earlier in the year was partly to blame; hefty 39% U.S. tariffs in place from August likely weighed on the sector. Moreover, energy output fell by double digits due to low electricity generation from nuclear power plants over the summer.

Expenditure drivers: Compared with the prior quarter's data, the reading for government consumption softened in Q3 (-0.2% in seasonally adjusted quarter-on-quarter terms vs +0.6% in Q2). In contrast, readings picked up for fixed investment (-0.1% vs -0.8% in Q2), exports of goods and services (+0.4% vs -12.6% in Q2) and imports of goods and services (+0.8% vs -6.4% in Q2). Finally, the variation in private consumption was the same as in the prior quarter (+0.4% in Q3 and Q2).

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