Switzerland’s economy responded positively to the easing of Covid restrictions in March, with 0.3% growth registered in Q2.

The hospitality, transport and events sectors have all had a positive impact from the lifting of all Covid curbs, according to government data published on Monday.

In line with economists’ forecasts, the rise in GDP also benefitted from robust consumer spending, Bloomberg reports.

In contrast, Switzerland’s manufacturing sector didn’t manage to maintain its elevated growth rates due to ongoing supply shortages and a global economic slowdown, declining for the first time in seven quarters, the report continues.

The Swiss government, back in June, forecast that the country’s GDP would increase by 2.6% this year. However, the forecast cautioned that Switzerland’s economy is still vulnerable to supply chain disruption, higher prices and heightened uncertainty as a result of the war in Ukraine.

Moreover, inflation in Switzerland remains far below that in other countries in Europe, hitting 3.3% last month, compared to 9.1% in the surrounding euro area.

Up to now, Switzerland has avoided such high inflation seen in other countries, partly due to a rising Swiss Franc lowering the cost of imported goods and services. At the end of last week, the Swiss Franc was trading at €1.023, whereas at the end of last year the same rate was 5.8% less at 0.964.

President of the Swiss National Bank, Thomas Jordan cautioned recently that price pressures are now broad-based and higher inflation rates may continue for a number of years. 

Central bank policymakers increased interest rates by half a point in June and may once again hike rates during the upcoming meeting scheduled for later this month.