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ECONOMY

Why the outlook for the Swiss economy in 2020 is positive

The outlook for the Swiss economy heading into 2020 is mainly positive although there was some bad news.

Why the outlook for the Swiss economy in 2020 is positive
Photo: WIkimedia commons

The forecast for 2020 comes from the Center for Economic Studies (KOF) at the Swiss Federal Institute of Technology in Zurich, which uses the so-called KOF Barometer to forecast economic trends.

It bases its findings on 219 indicators, including banking and consumer confidence, production, the exchange rate of the Swiss franc, money supply, interest rate spreads, and stock market prices.

The promising outlook for this year is attributed to a strong manufacturing industry, increase in foreign demand and private consumption, as well as the recovery in the construction sector.

READ ALSO: Nine stats to help explain the famously strong Swiss economy 

The Organisation for Economic Cooperation and Development (OECD) has also predicted economic growth for Switzerland.

“Private consumption will remain resilient, supported by low unemployment. A gloomy global environment will weigh on investment and trade, but the current account surplus will remain large”, the OECD said. 

For its part, the Swiss government predicted a GDP growth of 1.7 percent for 2020, but notes that the country’s export-reliant economy will be affected by the weak growth in the eurozone countries, which are Switzerland’s main trading partners.

“The export sectors, such as the metal and machinery industry, would suffer from sluggish international growth”, the State Secretariat for Economic Affairs (SECO) said. 

On the bright side, “certain segments of Swiss industry, specifically chemicals and pharmaceuticals, are currently not very exposed to economic developments abroad”, SECO noted.

Another measure of Switzerland’s healthy economy is an unprecedented boom in the number of businesses established in 2019: 44,482 new companies were created, an increase of 3 percent compared to 2018. 

A particularly high number of start-ups were created in the IT, mobility, consultancy, architecture, engineering, transport and logistics, and real estate industries. 

However slow EU growth is predicted to harm Switzerland's exports in 2020.

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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