In brief

Political stability will remain firm, thanks to an informal arrangement, often referred to as the "magic formula", whereby the four main parties work together in a coalition government. The coalition's immediate priorities will remain maintaining stability in domestic financial markets (following the failure of Credit Suisse in March 2023), consolidating the public finances and lifting economic growth. EIU expects real GDP growth to remain lacklustre in 2024, given continued weak domestic demand and the poor external environment, which will dampen demand for exports. We expect stronger rates of growth from 2025 as monetary policy loosening feeds through to the real economy.

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