Renewed lockdowns cause less economic damage as global supply chains remain intact. Return of price-setting power in European services industries expected. Switzerland’s GDP to recover back to pre-crisis levels in the third quarter 2021.
Chart of the month
While health authorities are struggling with COVID19 contact tracing, the economists’ “contact tracing” with the real economy is improving as more high frequency data becomes available. The most recent innovation is the State Secretariat for Economic Affairs’ (SECO) weekly GDP indicator for Switzerland, which is moving sideways in the fourth quarter. Hence, regional containment measures have slowed but not materially thrown back economic activity, in line with our forecasts. In Austria, where a nationwide lockdown was imposed, the annual GDP growth rate temporarily dropped by around 9 percentage points, indicating a significant, albeit less damaging impact of the second COVID-19 wave on the real economy.