“The invasion of Ukraine also has repercussions on the economic prospects: in the current year and in 2023, the increase in Swiss gross domestic product could in fact be reduced by about 0,5 percentage points. This is mainly due to indirect economic effects such as the loss of purchasing power due to inflation, which is expected to be greater than anticipated so far. Russia's attack on Ukraine is a historic event that, without a doubt, allows us to discuss a different world between before and after 24.02.2022.

Given the political and humanitarian implications of the conflict, it seems almost inappropriate to dwell on the economic effects of this war for Switzerland. However, a first assessment in this area shows that in 2022 the Russian invasion could cost Switzerland about half a percentage point of GDP growth. For 2023, another loss of momentum of a similar magnitude is also expected. This means that Switzerland will not experience a recession, but that the recovery from the crisis triggered by Covid-19 will be severely slowed down. Instead of the 3% assumed previously, growth should be around 2022% in 2,5, and around 2023% in 1,5, which is clearly below potential growth. The most important causes explaining this slowdown in economic growth are indirect in nature.

However, some direct effects must also be considered, above all due to the economic sanctions imposed on Russia, which exclude it from the world trade and financial system in many sectors. Swiss inflation, which has already clearly returned to positive values, will remain high due to rising prices for energy sources and food. Nevertheless, BAK Economics predicts that in 2022 the Swiss inflation rate will remain on average still below 2%, even if it approaches this limit.
Record energy and fuel prices are also a significant factor affecting consumer confidence, coupled with falling prices on financial markets and general uncertainty about future conflict developments, which cause a further indirect effect. of slowing down. The sanctions imposed on Russia will instead directly eliminate some business opportunities.

However, it should be emphasized that Swiss exports of goods to Russia represent only just over 1% of the total (Ukraine's share: 0,2%) and that Russia and Ukraine each account for around 0,1% of the total. imports. Commercial relations with both countries are therefore not decisive for Swiss economic development. However, in some cases, significant losses are to be expected, such as in the wealth management, commodity trading and tourism sectors.

  • Almost a third of Russian private assets are located in Switzerland.
  • According to the economic report on Russia published by the Swiss embassy, ​​around 80% of international trade in Russian commodities is carried out by Swiss financial service providers.
  • In terms of overnight stays, the share of Russian citizens in Swiss accommodation facilities in 2019 was around 0,9%. However, these guests typically spend around 25% more than the median of all tourists' spending.

In addition to the assessment of the immediate economic effects, it is already possible to formulate some initial reflections relating to medium and long-term changes. The impending upheavals in the political landscape are likely to have significant consequences in the economic sphere as well. The reception and integration of (possibly) millions of Ukrainian refugees, the sharp increase in expenditure on defense or the restructuring of energy supply facilities and the extraction and processing of raw materials are associated with high costs, which reduce the growth potential and will eventually be financed, at least for the time being, by further increases in public debt. Changes in the direction of innovation policy and global cooperation between different countries are also likely. Although many aspects still remain to be clarified, the economic and social changes triggered by the Russian invasion will probably have a clearly negative impact on the long-term level of the economy and prosperity ”.