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ZURICH, Dec 15 (Reuters) - Switzerland’s economy is expected to shrink by 3.3% this year before recovering in 2021, the government said on Tuesday, although the second wave of the coronavirus will slow the rebound next year.
The 2020 forecast is an improvement from the 3.8% decline predicted by the State Secretariat for Economic Affairs (SECO) in October, although it would still be the worst downturn the country has seen since 1975.
SECO said it expects the Swiss economy to grow by 3% in 2021, slower than the 3.8% rate previously forecast.
“In the winter half-year of 2020/2021, the second wave of the coronavirus will have an adverse effect on the Swiss economy,” SECO said.
Switzerland has tried to navigate a middle path during the latest coronavirus outbreak, tightening some restrictions but steering clear of a full lockdown.
The strategy has had mixed success with stubbornly high infection levels, while restaurateurs have warned an evening shutdown recently ordered by the government means the death of their businesses “in installments.”
Rising case numbers and the measures to combat the coronavirus will slow international economic development considerably in the coming months, SECO said.
Still, it expected the economic impact of the latest lockdown to be less severe than earlier this year, with output returning to pre-crisis levels by the end of the 2021.
In the longer term, even hard-hit industries like tourism are expected to participate in a widespread upswing, with SECO forecasting GDP growth at 3.1% in 2022.
Unemployment is expected to rise slightly in the short term from an expected rate of 3.2% in 2020 to 3.3% in 2021, before falling to 3% in 2022. (Reporting by John Revill; editing by Brenna Hughes Neghaiwi)