Foreword 3

Basic statistics of Switzerland, 2025 7

Executive summary 8

1 Navigating through uncertainty 17

  1.1. The economic outlook is clouded by uncertainty 18

  1.2. Policy options to stabilise the economy remain limited 24

  1.3. Ensuring the long-term sustainability of public finances 30

  1.4. Future growth will hinge on strengthening ties with trading partners 42

  References 48

2 Improving the responsiveness of housing supply 53

  2.1. Switzerland is increasingly struggling with a lack of affordable housing 54

  2.2. Addressing barriers and bottlenecks in housing supply 59

  References 71

3 Adapting to climate change 75

  3.1. Preparing for climate change-related challenges reduces economic costs 76

  3.2. Mitigation policy makers face a difficult balancing act to continue reducing GHG emissions 86

  References 94

4 Unlocking broad-based productivity growth 99

  4.1. Enhancing market functioning to improve resource allocation 101

  4.2. Consolidating Switzerland’s innovation lead 114

  4.3. Closing skills shortages 120

  4.4. Strengthening framework conditions for productivity growth 126

  References 133