COVID-19: Five Years Later - Switzerland's Economic Balance Sheet

The lifeline for the economy during the COVID-19 pandemic was the largest financial aid package ever allocated in Switzerland. Five years later, what is the economic situation in Ticino and the rest of the country? Prof. Mario Jametti, Full Professor at the Faculty of Economics of Università della Svizzera italiana (USI) and Director of the Institute for Economic Research (IRE), and Prof. Fabrizio Mazzonna, Full Professor at USI Faculty of Economics, discussed the topic on the RSI broadcast Quotidiano.

Despite the difficult period we have been through, the current situation allows for some optimism: "The economy, in Switzerland as well as in Ticino, demonstrated considerable resilience in recovering from the crisis: the growth rate following the crisis has exceeded the decline experienced during the pandemic," explained Professor Mario Jametti. "What we cannot yet definitively determine is whether there have been any permanent effects due to the pandemic, as it is difficult to determine which consequences are related to COVID-19 and which are related to other factors, such as the war in Ukraine."

However, what can be established with certainty is that the pandemic and the associated lockdown measures have changed consumer habits, as Professor Fabrizio Mazzonna explained: "During COVID-19, people were unable to go out, including visiting restaurants. As a result, a significant amount of consumption shifted to the home. This led to a transition from service-based consumption to the consumption of goods. However, many companies were unprepared for this change, as they did not have sufficiently flexible offerings to meet the new demand. This was one of the first triggers of the inflation we experienced immediately after COVID-19, also due to the war in Ukraine and the consequent increase in energy costs."

While the pandemic has negatively impacted some sectors, certain areas of the economy have benefited. "Trade and tourism in Ticino have both experienced benefits, particularly during the pandemic years, with tourism reporting positive statistics. However, we currently lack medium- and long-term data, making it difficult to provide a comprehensive assessment," commented the Director of IRE.

The pandemic has also left some questions unanswered regarding the risks associated with excessive globalisation of production: "Producing everything in one place, in many cases, China, exposes the production chain to considerable fragility: all it takes is an outbreak at the port of Shanghai or a ship blocking the Suez Canal and the global supply chain is paralysed. This happens because industrial production is generally orientated towards reducing costs but pays little attention to risk diversification", concluded Professor Mazzonna.