EFG International : How exposed is Switzerland to the war in Ukraine?

This makes Switzerland less exposed than many other countries to the risks posed by the current crisis and higher energy prices. For comparison, liquid fossil fuels are the source of 57.5% of the total EU energy supply, and coal, also mostly imported from Russia, adds another 13%, for a total of more than 71%.

Furthermore, the impact on Swiss inflation due to higher import prices will most likely be mitigated by the appreciation of the Swiss franc that would be expected if geopolitical tensions escalated further.

In conclusion, the direct impact of the crisis between Russia and Western countries on the Swiss economy is expected to be limited. However, the longer it lasts the higher the chance that growth in the EU, Switzerland's main trading partner, will slow and that high energy prices will raise Swiss inflation, negatively affecting the Swiss economy.

¹ Another channel of transmission of the crisis on Swiss GDP growth is the financial channel: if cross-border banking activities are constrained by sanctions on Russian entities that may impact the activity of the Swiss banking sector, but the impact is hard to evaluate.