BAK Economics: GDP 2026 at +1.8%, possible rate hike (cross-border guide)

Context

In brief

• BAK Economics raises the 2026 GDP forecast to 1.8% (from 0.8%).
• Inflation forecast for 2026 at 0.6%, 2027 at 0.8%.
• Possible increase in SNB interest rates as early as December.
• 2027 growth revised downward to 1.3%.

Key facts

• Institution: BAK Economics (Renish institute)
• 2026 GDP forecast: 1.8%
• Previous 2026 GDP forecast: 0.8%
• Q2 2026 growth: 1.5%
• 2027 GDP forecast: 1.3%
• Inflation 2026: 0.6%
• Inflation 2027: 0.8%

The revision of economic forecasts

The experts at the Renish institute BAK Economics have significantly raised their forecasts for Swiss economic growth this year. According to a press release issued on August 18, 2025, gross domestic product (GDP) will grow by 1.8% in 2026, excluding the impact of sporting events. This figure represents a major adjustment compared to the previously forecasted 0.8%. The primary reason, explained by BAK, lies in the surprisingly positive data regarding economic expansion in the second quarter, which recorded a +1.5% increase compared to the first half of the year.

For 2027, the Basel-based specialists have instead lowered their forecast from 1.4% to 1.3%. The strong dynamics recorded in 2026 are partly attributable to anticipation effects related to U.S. customs policy. However, economists remain cautious due to geopolitical uncertainties and the conflict in the Middle East. 'Planning security, which is essential for investments, has not improved substantially,' reads the official statement from the institute.

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Operational details

Implications for Monetary Policy and Investments

The economic outlook described by BAK Economics has direct repercussions on the decisions of the Swiss National Bank (SNB). Despite inflation remaining low, the firmer Swiss economic situation and the clearly positive return of price increases have altered the framework for monetary policy. According to the institute, it is likely that the SNB will raise interest rates as early as December. However, this adjustment to the policy rate should not be interpreted as the beginning of a classic monetary tightening cycle. It would rather be a normalization measure, necessary to align interest rates with the new economic reality.

For Swiss workers and families, this dynamic reflects on the cost of living and financial planning. Inflation at 0.6% in 2026 and 0.8% in 2027 suggests that the erosion of purchasing power will be contained, but not absent. Wages, often linked to collective labor agreements, may not adjust immediately to these changes, requiring careful management of household budgets. Companies, on the other hand, face challenges related to planning security, a fundamental element for investments that, according to BAK, has not substantially improved.

Comparison Between Previous and Current Forecasts

The revision of the forecasts highlights a significant change in direction. The shift from a projected growth of 0.8% to 1.8% for 2026 signals an unexpected economic acceleration. This improvement was driven primarily by the second quarter, with an increase of 1.5%. In contrast, the forecast for 2027 has fallen from 1.4% to 1.3%, indicating a moderation of future growth. This asymmetry suggests that the stimulating effect of recent data may not be sustainable in the long term without further supporting factors.

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Key points

Procedures and Tools for Financial Planning

In response to a potential increase in SNB interest rates, Swiss residents should review their savings and investment strategies. It is advisable to check the conditions of current accounts and term deposits, as a tightening pace, though limited to normalization, can alter the yield of low-risk instruments. For those with variable-rate mortgages, rising rates could affect monthly installments, making it useful to simulate new payment scenarios.

To monitor inflation trends and their impact on the cost of living, official data published by the Federal Statistical Office can be consulted, although the cited source specifically refers to BAK Economics' estimates. Citizens can also use digital tools to compare consumer prices and plan future expenses. If in doubt about portfolio management, consulting an an independent financial advisor can help assess the suitability of investments based on one's time horizon and risk tolerance.

Concrete Actions for the Coming Months

1. Check the clauses of mortgage contracts and bank deposits to understand interest rate exposure. 2. Update the household budget, considering an expected inflation between 0.6% and 0.8%. 3. Monitor SNB communications for any official announcements on key interest rates. 4. Evaluate the need to reskill or invest in human capital to maintain competitiveness in the job market, given that planning certainty for businesses remains weak.

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