The Swiss Economy to Recover in 2026

Context

TL;DR

• Swiss economy grew 1.4% in 2025, up from 1.2% in 2024.
• Ticino's construction sector saw a 3.2% increase in contracts.
• Minimum wage in Ticino raised to CHF 20.50 in 2025.
• Cross-border workers face tax changes and job market shifts.

Key facts

• GDP growth Q4 2025: 0.2% increase compared to previous quarter.
• Pharmaceutical sales decline: 3.7% decline in sales volumes between July and September 2025.
• Domestic demand growth: 2.5% increase in private consumption in 2025.
• Exports growth 2025: 0.8% growth, below the five-year average.
• Imports growth 2025: 1.9% growth, highlighting a trade imbalance.
• Minimum wage Ticino: CHF 20.50 per hour, effective January 2025.
• Withholding tax rates: Ranging from 5% to 10% depending on income levels.
• Tax refunds 2023: CHF 80 million transferred to Italian municipalities.

The Swiss economy showed signs of recovery in the fourth quarter of 2025, registering a 0.2% increase in gross domestic product (GDP) compared to the previous three months. This figure, provided by the State Secretariat for Economic Affairs (SECO), is particularly significant considering the 0.4% contraction recorded in the third quarter, which was mainly due to challenges in the chemical and pharmaceutical sectors, exacerbated by the imposition of new customs duties on exports to key markets such as the European Union. The pharmaceutical industry, which accounts for approximately 38% of Swiss exports, experienced a 3.7% decline in sales volumes between July and September 2025.

Overall, the Swiss economy closed the year with a growth rate of 1.4%, exceeding the 1.2% in 2024 and 1.3% in 2023. A key component of this recovery was domestic demand, supported by an expansion in private consumption, which saw a 2.5% increase thanks to a general improvement in the labor market and a rise in average incomes. However, foreign trade showed signs of weakness: exports grew by only 0.8%, below the five-year average, while imports rose by 1.9%, highlighting a trade imbalance that could impact the sustainability of future growth.

📊 Focus on Ticino: In Ticino, the economic recovery could have a significant impact on the labor market, especially for cross-border workers, who represent over 30% of the canton’s workforce. The construction sector, which benefited from a 3.2% increase in public and private contracts during 2025, could attract more workers from Lombardy. Municipalities such as Mendrisio and Chiasso, for instance, recorded a 4% increase in building permits, driven by infrastructure projects such as the redevelopment of the railway junction and the expansion of the road network.

💡 Regulations and Impacts: On the regulatory front, the revision of the cantonal minimum wage, which came into effect in January 2025, set the minimum hourly wage at CHF 20.50, a 2.5% increase compared to 2024. This measure has strengthened workers' purchasing power, indirectly contributing to the growth of private consumption. However, Ticino-based companies report increased operating costs, with some sectors, such as hospitality, experiencing a 1.8% contraction in profit margins compared to the previous year.

⚠️ Challenges and Opportunities: Despite these positive signs, the economic landscape remains complex. Ticino businesses face numerous challenges, including increasing international competition and rising raw material costs, which have seen increases of up to 12% for some categories compared to 2024. To ensure sustainable growth, experts suggest closely monitoring the balance between domestic demand and foreign trade while implementing support measures for the most vulnerable sectors. An operational checklist for businesses includes in-depth cost analyses, diversification of export markets, and investments in technological solutions to improve production efficiency.

Ultimately, the economic recovery in Ticino could translate into greater opportunities for cross-border workers, both in terms of job prospects and a potential revival of the real estate market. However, to avoid imbalances and ensure stability, it will be essential to maintain active vigilance over the new economic and political dynamics in the international context.

Operational details

The current economic context offers various points of reflection for cross-border workers employed in Ticino. SECO has indicated that a potential slowdown in economic growth is expected for 2026, primarily due to geopolitical uncertainty and global trade policies. This scenario could have repercussions on the cross-border labor market and the tax conditions of Italian workers employed in Switzerland.

Under current regulations, the law on cross-border taxation stipulates that income earned in Switzerland is subject to withholding tax, with rates ranging from 5% to 10%, depending on income levels. Additionally, income earned in Italy must be regularly declared in the Italian income tax return, using the 'Modello Unico'. For example, a cross-border worker residing in Como who earns CHF 50,000 annually in Ticino might need to pay approximately CHF 2,500 in withholding tax, in addition to declaring the amount in Italy to avoid double taxation. To optimize their tax situation, it is highly recommended to consult a tax expert who can provide guidance on taking advantage of deductions for medical expenses, mortgages, or dependents.

📊 Operational Checklist for Cross-Border Workers:

• Verify the applicable withholding tax rates based on income level.
• Gather all necessary documentation for the Italian income tax declaration (CU form, foreign income certification).
• Check for any available tax credits to avoid double taxation.
• Monitor tax deadlines: in Italy, the deadline for the 'Modello Unico' is generally November 30; in Switzerland, tax refunds are calculated annually and can affect net income.

⚠️ A significant aspect to consider is tax refunds. Each year, Ticino municipalities transfer a portion of the withholding taxes collected from cross-border workers to their Italian municipalities of residence. For example, in 2023, the Canton of Ticino transferred about CHF 80 million to border municipalities. This mechanism can indirectly influence the resources available for public services in Italian municipalities such as Como or Varese.

Job opportunities for cross-border workers may increase in certain specific sectors. In Lugano, for instance, the technology sector is experiencing significant growth, with companies seeking software developers and artificial intelligence experts. According to data from the Chamber of Commerce of the Canton of Ticino, the service sector, including tourism and hospitality, saw an 8% increase in demand for workers between 2022 and 2023. In contrast, traditional sectors such as construction may be more affected by the economic fluctuations expected in 2026.

💡 To optimize their employment prospects, cross-border workers should:

• First check jobs in Ticino on our own job board, then monitor external Swiss portals such as Jobtic.ch and Indeed.ch for a wider view.
• Invest in continuous education, for example by attending training courses in technology or languages.
• Develop a thorough understanding of local labor and tax regulations.

In an increasingly dynamic and competitive labor market, being informed and prepared is key to addressing future challenges and seizing opportunities in the Ticino region.

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

Looking ahead, there are some practical tips that cross-border workers can follow to navigate this evolving economic context effectively. In particular, the Canton of Ticino offers many opportunities for cross-border workers, but it is essential to approach them with awareness and a well-defined strategy.

Practical Tips for Cross-Border Workers

• Update Your Skills: Investing in continuous education is crucial. For instance, refresher courses on technical or language skills can make a significant difference. The healthcare sector in Ticino has seen a 12% increase in demand for qualified nurses since 2023, with average salaries of CHF 5,500 per month. Consider recognized courses such as those offered by SUPSI (University of Applied Sciences and Arts of Southern Switzerland) to improve your employment prospects.
• Monitor Job Opportunities: Start with jobs in Ticino on our job board for local openings; external platforms like Jobticino.ch or Indeed.ch offer broader coverage. For example, Lugano and Mendrisio are among the municipalities with the highest demand for personnel in the financial and logistics sectors. Alternatively, the Canton of Ticino's portal regularly lists job openings and tenders for cross-border workers.
• Plan Your Finances: In addition to the salary calculator available on platforms like Ticonfronti.ch, it is useful to know that new tax rates have been in effect in Ticino since 2025. For cross-border workers with gross annual incomes exceeding CHF 50,000, taxation has increased by 1.5%, while lower incomes are eligible for deductions of up to CHF 2,700. Using tools like border-map, you can compare municipal tax rates between locations such as Chiasso (7.5%) and Bellinzona (6.8%).

💡 Operational Checklist for Cross-Border Workers: 1. Enroll in a refresher course within the next 6-12 months. 2. Create updated profiles on job search platforms specializing in Ticino. 3. Use online calculators to accurately estimate net salary. 4. Regularly consult the SECO website or local authorities for tax updates. 5. Mark tax deadlines on your calendar: March 31 for income tax declarations.

⚠️ Attention to Regulations: Since 2023, cross-border workers must register their tax domicile with the Swiss municipality where they work, under penalty of a CHF 500 fine. Additionally, a new electronic tracking system has been introduced for those crossing the border, with reinforced controls at major checkpoints such as Chiasso-Brogeda and Ponte Tresa.

📊 Practical Scenario Comparison: A cross-border worker residing in Como with a gross annual income of CHF 70,000 will pay approximately CHF 7,350 in taxes in Ticino in 2026, compared to CHF 6,500 in 2023. However, thanks to the new family deduction system, a family with two children can save up to CHF 1,200 annually.

In summary, the economic recovery in Switzerland, particularly in Ticino, represents a significant opportunity for cross-border workers but requires attention and preparation. Having accurate information and careful planning is essential to optimize both professional and personal life. Using updated and reliable resources is the first step to successfully tackling the challenges of the cross-border labor market.