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UBS outlook Switzerland: How soon will the population break the 10-million barrier?

Zurich/Basel Media Switzerland


The Swiss population has grown rapidly in recent years, in particular due to high immigration. This bolsters the Swiss economy, thanks to the high standard of education and the high employment rate. But this rapid population increase can also create new problems.

Zurich/Basel, 8 November 2012 – The latest issue of "UBS Outlook Switzerland" primarily addresses the topic of population growth. The surprisingly rapid increase in population in recent years is the result of high immigration rate. Population growth is likely to accelerate more quickly in coming years than was expected a few years ago – provided that the agreement on the free movement of persons is not terminated. Extrapolating the population increase from the past five years, Switzerland is likely to exceed the threshold of 10 million in the year 2031.

Immigrants into Switzerland are characterized by their high standard of education and a high level of employment, which will strengthen the Swiss economy in the long term. This is also clearly reflected in the figures: following decades of low growth, per capita gross domestic product has been growing faster in Switzerland than abroad since 2006. The free movement of persons is strengthening Switzerland's competitiveness, thereby safeguarding its prosperity. Switzerland's appeal is likely to endure for many more years.

The continual increase in life expectancy and the associated gradual aging of the population will present our retirement provision system with growing challenges. In connection with this, the theory is occasionally put forward that a high level of immigration of young people – predominantly from demographically young emerging countries – could prevent the strained pension systems of aging industrialized nations from collapsing. UBS concludes that while high immigration may ease the challenges that retirement provision systems face, it will in no way be able to solve the problem entirely.

UBS lowers growth forecast

The economic outlook has become gloomier over the past few months. While UBS still anticipates positive growth rates, it has lowered its growth forecasts for this year and next. UBS now only expects growth of 1.1% for this year (previously 1.3%) and 0.9% for next year (previously 1.4%). UBS has also halved the inflation forecast for next year to 0.6% from 1.2%.

Survey results in recent months indicate that the gap between the manufacturing and service sectors in Switzerland has closed slightly. The manufacturing sector has stabilized at a low level or even nominally improved, according to some indicators. At the same time, stagnation at a high level is slowly but surely becoming evident in the service sector.

Besides analyses of the real estate and financial markets, the supplement provided with UBS outlook Switzerland includes an assessment by our analysts of the equity and bond markets in Switzerland.



Media contacts

Daniel Kalt, Chief Economist UBS Switzerland
Phone +41 44 234 25 60,

Caesar Lack, UBS CIO Wealth Management Research
Phone +41 44 234 44 13,

Sibille Duss, UBS CIO Wealth Management Research
Phone +41 44 235 69 54,

Stefan R. Meyer, UBS CIO Wealth Management Research
Phone +41 44 235 38 26,

UBS outlook Switzerland:

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