Switzerland’s economy gained pace in Q3 thanks to a trade and domestic spending boost.

The country’s GDP grew 0.2% compared to the previous three months when an increase of 0.1% growth was registered, according to Swiss government data released on Tuesday.

In addition, private consumption rose 0.7%, whilst cross-border commerce edged up 2.3%, ending a year of negative readings, Bloomberg reports.

During the pandemic, Switzerland coped comparatively well, and also during the current energy crisis that is impacting the majority of European countries. Switzerland is predicted to avoid a recession, and Bloomberg economists forecast just one-quarter of contraction over winter.

According to the government’s most recent forecast, Switzerland’s economy is set to grow by 2% this year and 1.1% in 2023. However, this is reliant on the power supply, and a major electricity or gas outage could severely impact output.

Moreover, the Swiss government fears energy embargoes put in place by neighbouring nations. As a result, the government has approved emergency steps for gas rationing should there be supply issues.

In addition, earlier this month, the Organisation for Economic Development and Cooperation forecast Switzerland’s GDP to grow by 2.1% in 2022, a reduction from the prior 2.5% prediction. The principal motive for the decline is the war in Ukraine impacting the global economy and affecting Swiss domestic demand and exports.

The OECD forecast 0.6% growth for 2023, under the previous 1.4% estimate, Swiss Info reports. Yet a recovery to 1.4% is predicted for 2024. The OECD economists forecast confidence will rally and consumers will progressively reduce their high savings rate.

Furthermore, soaring energy prices will hold inflation far above the central bank’s target, with the OECD predicting a rate of 2.9% in 2022 and just a marginal decline to 2.5% in 2024.