KOF economists sharply raise Switzerland’s growth forecast

Swiss economists have nearly doubled their 2026 growth forecast, lifting it from 0.9% to 1.7%. The upgrade marks a clear improvement in expectations for the country’s economy after a weaker outlook in June. The latest KOF Consensus Forecast, based on responses from 17 economists, puts seasonally adjusted real GDP growth at 1.7% this year and the same rate in 2027.

The survey was conducted between September 3 and 23, as economists reassessed investment, trade and domestic activity. The revision gives Swiss companies and policymakers a more constructive baseline for the months ahead, although it does not remove the risks facing an export focused economy.

KOF’s updated figures arrive as Switzerland continues to navigate shifting global trade conditions, a strong franc and uncertainty in key overseas markets. The institute’s economists also revised their expectations for foreign trade upwards, supporting the stronger overall GDP projection.

The forecast does not describe a boom. It points to steady expansion, with growth gaining support from investment and construction while inflation remains subdued. For households, employers and public authorities, the change signals a broader improvement in the economic climate and a firmer platform for planning in 2026 and 2027.

Investment has become the strongest engine behind the brighter forecast. KOF economists now expect real fixed capital formation to increase by 1.5% in 2026, compared with 0.9% in their June assessment. For 2027, they see growth of 2.2%, up from the earlier estimate of 1.8%.

The change suggests that businesses and investors may be preparing to commit more capital despite uncertain international conditions. Fixed capital formation includes spending that expands or renews productive capacity, giving the forecast particular importance for Swiss manufacturers, technology firms and service companies.

Construction is also expected to contribute more strongly. KOF raised its forecast for construction investment to 2.4% in 2026, from 1.2% in June. The estimate for 2027 increased to 1.9%, compared with the previous projection of 1.6%.

The figures cover Switzerland as a whole and do not provide a cantonal breakdown. They nevertheless point to activity in projects ranging from commercial development to infrastructure and building renewal. Stronger investment can support contractors, suppliers and skilled workers across the country, while also improving the economy’s capacity over time. The forecast remains an estimate, and the pace will depend on financing conditions, demand and confidence among Swiss companies.

Inflation is expected to remain low as growth improves. KOF economists now forecast a rise in Switzerland’s consumer price index of 0.6% in 2026, slightly below the 0.7% projection issued in June. For 2027, they expect inflation of 0.8%, down from 0.9%.

That combination of stronger output and modest price pressure could give households and businesses more stability in the near term. Lower inflation can protect purchasing power, while predictable costs help companies set wages, investment budgets and prices. The forecast does not indicate falling prices across the economy. It points to a restrained rate of increase.

The labour market outlook has changed little. KOF expects unemployment to average 3.1% in 2026 and 3% in 2027. Those figures suggest that the economic upgrade will bring continued employment resilience rather than a dramatic shift in labour market conditions.

The forecast also offers no major movement in the franc’s external value. Economists expect the currency to trade at around 0.93 francs per euro in three months and 0.92 in 12 months. Against the US dollar, they see a modest decline to 0.81 francs in three months and 0.80 in a year. For Swiss exporters, the franc’s strength remains an important factor in competitiveness.