Switzerland Upgrades 2026 Growth Forecast to 1.8% Following New Trade Agreement

Switzerland has raised its projected economic growth for 2026 to 1.8%, up from the previous forecast of 1.3%, following the formal ratification of a new trade agreement with the European Union. The accord, signed in November 2025, includes expanded market access for Swiss goods in EU countries, streamlining customs procedures and reducing non-tariff barriers in sectors such as machinery, pharmaceuticals, and precision instruments. The upgrade reflects stronger-than-expected export performance in the third quarter of 2025, where Swiss exports to EU nations rose by 5.2% year-on-year. The Swiss Federal Statistical Office reported that industrial output increased by 2.7% in the same period, driven by demand from German and French markets. The trade pact is anticipated to generate an additional CHF 3.2 billion in annual export value by 2027. Key sectors expected to benefit include the pharmaceutical industry, which accounts for 40% of Swiss exports, and the machinery and equipment sector, responsible for 28% of total exports. The agreement also includes provisions for regulatory cooperation, allowing Swiss firms to maintain access to EU standards without dual certification. Financial markets responded positively, with the Swiss Market Index (SMI) gaining 1.4% in early trading. Swiss franc strength eased slightly as investors priced in higher inflationary pressure from increased trade activity. The Swiss National Bank has signaled it will monitor growth momentum closely ahead of its next policy meeting in February 2026.