Russian war weighs significantly more on Swiss economy than sanctions

A recently published study by economysuisse shows that the war in Ukraine is weighing heavily on the Swiss economy as a whole. One in two Swiss companies surveyed is affected. These are mainly difficulties related to the supply of raw materials and disruptions in the energy markets. Western sanctions also have consequences: about one in four companies surveyed say they have been affected. Companies affected by the effects of the war are twice as numerous as those affected by Western sanctions. The vast majority of companies support the sanctions, even if they weigh on some of them.

The detailed assessment of the economysuisse survey shows that the impact of the sanctions and the consequences of the war varies widely from industry to industry:

  • Banks and asset managers are most affected by Western sanctions. About one in two financial institutions has to find solutions for blocking financial assets and excluding five Russian banks from the SWIFT system. Many wealth management consultancies also said they were affected by the sanctions.
  • The export industry has been most affected by the war: this is the case in the chemical, electrical and metal industries, as well as in wholesale. These industries are also hard hit by the sanctions – between 30 and 40% of companies. First explanation: Some companies operate sites in Russia and Belarus – or get their raw materials there. Production often stops there. Second explanation: they have to do with export bans. This affects, often indirectly, many Swiss companies as suppliers to European producers.
  • Sectors little affected by the sanctions (textiles, construction, agri-food) claim to have been heavily affected by the effects of the war. Supply difficulties and rising prices of materials and raw materials (wood, oil, energy) complicate and increase production costs.
  • In terms of transportation, it should be noted that many truck drivers in Europe come from Russia, Belarus and Ukraine. They are not the target of sanctions, but it is unclear whether they will be able to continue crossing the borders. The aviation industry is also affected by the closure of airspace, both in the West and in Russia.
  • Tourism has been particularly affected by the suspension of the visa agreement with Russia – although not always directly. The Russian hosts are partly staying away from Switzerland for fear of possible repression. Some players in the tourism sector also say that here and there American and Asian travelers are avoiding Europe because of the war.
  • The pharmaceutical industry also notes that the sanctions have consequences, even if medicines are not explicitly the target of the sanctions: due to the difficulties in international payment transactions, it is difficult or impossible to deliver medicines to, for example, a hospital in Donbass.

Sanctions are certainly weighing on exporters and the Swiss financial center, but overall the problems remain limited. The real challenge lies in the problems created by the war. Given the brutality, there is great uncertainty about the future measures Russia will take. Without prospects for a peaceful resolution of the conflict, supply difficulties and high prices for energy, raw materials and processed products will persist.

These results come from a survey conducted by economysuisse from 2 to 10 March 2022. The answers are not weighted and the results do not pretend to be representative. For more information about the survey, we recommend that you read this article.

Leave a Comment