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By John Revill
ZURICH, April 23 (Reuters) - The Swiss government forecast the country's economy will shrink 6.7% this year, saying it expected the recession triggered by the coronavirus epidemic to be worse than feared even last month.
The export-driven economy is set to grow 5.2% next year adjusted for large sporting events, the State Secretariat for Economic Affairs (SECO) said on Thursday in a revision of its March forecast.
It had originally said it expected the country's economy to shrink 1.5% in 2020, before rebounding with a 3.3% increase in output in 2021.
The downturn for 2020 would be the worst since 1975 in the aftermath of the oil price shock.
"This is one of the worst economic crises since World War II. The speed and the force of the downturn is simply unprecedented," said SECO economist Ronald Indergand.
"Within two months the economic situation has been wrecked."
Restrictions introduced to halt the coronavirus -- such as the shutdown of some companies in the hospitality, retail and leisure sector -- will trigger a very sharp downturn in economic activity during the first half of 2020, SECO said.
Finance Minister Ueli Maurer said on Wednesday the lockdown, which is due to be gradually relaxed from April 27, was costing 5 billion Swiss francs ($5.13 billion) per week in lost output.
Foreign trade has been devastated, while consumer spending will fall as people work reduced hours or lose their jobs.
SECO said it expects the unemployment rate to rise to 3.9% this year and 4.1% in 2021. It forecast consumer prices would fall both years.
In response to the crisis, Switzerland has launched its biggest economic aid package ever, providing 62 billion francs for businesses in government-backed bank loans and support for its short-time working scheme.
SECO described the recovery in 2021 as "fragile".
Indergand said the government's credit guarantees and the short-time working scheme were providing life-support to the economy.
"If the situation with the shutdown should have to be prolonged for much longer, at some point the life-support system is going to eventually fail," he said.
$1 = 0.9744 Swiss francs Editing by Michael Shields