Swiss government lowers 2021 GDP forecast

BY Reuters | ECONOMIC | 09/16/21 03:09 AM EDT

ZURICH, Sept 16 (Reuters) - Switzerland's economy is expected to grow by 3.2% this year, the government said on Thursday, lowering its full year outlook as a less sunny global picture limited Switzerland's recovery.

"The economic recovery is set to continue as expected, though growth is initially less dynamic than forecast previously," the State Secretariat for Economic Affairs (SECO) said in a statement.

A less vigorous global recovery, marked by capacity bottlenecks limiting the growth of global industrial production and tightened coronavirus measures hampering the services sector in some countries, meant Switzerland's economic recovery was expected to grow less this year than the 3.6% growth it forecast in June, the government expert group found.

"The downward revision compared with the June forecast (+3.6%) is also due to the fact that, according to the latest data, the economic slump in 2020 was not quite as severe, meaning the catch-up potential is also lower overall."

The upturn is expected to pick up next year, with the Swiss economy anticipated to grow at a rate of 3.4% in 2022, the government said, higher than its previous forecast of 3.3%. (Reporting by Brenna Hughes Neghaiwi Editing by Riham Alkousaa)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.