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(Sharecast News) - Switzerland's economy returned to growth in the final quarter of 2025, with gross domestic product rising 0.2% quarter on quarter after a 0.5% contraction in the third quarter, according to preliminary data from the statistics office released on Monday.
The figures, adjusted for seasonal factors and large sporting events, point to a modest rebound following a mid-year slump linked in part to US tariff measures.
For the full year, GDP expanded by 1.4%, up from 1.2% in 2024 and 1.3% in 2023, but below the country's long-term average growth rate of around 1.8% since 1981.
On a per capita basis, the economy grew by 0.5% in 2025, while GDP per capita has risen 4.8% since 2019.
The recovery was driven primarily by the services sector, which grew at an above-average pace by historical standards, with finance and trade providing particular support, especially in the first half of the year.
By contrast, the export-oriented industrial sector remained under pressure and contracted for a third consecutive year.
While pharmaceuticals recorded growth, it was insufficient to offset declines in other manufacturing segments.
A challenging external backdrop weighed heavily on industry.
Switzerland was hit by US tariffs that were raised to 39% in July before being reduced to 15% from mid-November, with exemptions for certain goods including pharmaceuticals, some chemicals, gold and coffee.
Economists expected a modest pick-up in exports in early 2026 as firms brought forward shipments to the US under the revised tariff regime.
European demand was also described as extremely soft, with exports to Germany falling significantly.
At the same time, the appreciation of the Swiss franc - which had climbed to multi-year highs against the euro and dollar amid safe-haven flows - was eroding international competitiveness, adding a braking effect on trade-exposed sectors.
The 1.4% annual expansion broadly matched government projections but came in slightly below the Swiss National Bank's 1.5% forecast made in December.
The central bank said it expected growth to slow to around 1% in 2026 and did not rule out cutting its benchmark rate below zero from the current 0%, although policymakers signalled reluctance given the impact on savers.
Early indicators suggested continued headwinds, with layoffs reportedly rising in parts of the pharmaceutical industry and small and medium-sized enterprises announcing job reductions or production shifts abroad.
Unemployment had edged higher since 2023, though January saw a slight decline on a seasonally adjusted basis.
Final detailed growth data was due for release on 27 February.
Reporting by Josh White for Sharecast.com.