Forecast update. Quite in line with expectations shaped by erratic U.S. trade policy Switzerland's first quarter GDP growth does not impress the observer, the «KOF Surprise Indicator» tells. The new reading of -0.057 (down from -0.042, revised) puts Swiss GDP year-on-year growth estimate at 0.6 percent in 2025, first quarter continuing its downward slide.

Nowcast. Sirens projecting rather pessimistic pictures of the new presidency in the United States of America were proved right when new, extreme tariffs were slapped on imports from all over the world between January and April. Despite some temporal lifting of some tariffs the damage has already been done and will last due to its impact on investment mood and the time it will take to build new value chains. The new round of interest rate cuts puts upward pressure on the Swiss Franc forcing likewise easing of monetary policy conditions in Switzerland to prevent compound adverse effect on export demand.

Outlook. With controversial U.S. trade policy dragging on and no prospect of peace in Ukraine very little impulses for a turnaround are in sight. There is some hope for better business perspectives in the medium term once the German government starts spending the dozens of billions earmarked for defence and infrastructure investments.