Switzerland’s GDP grew just 0.1% in Q2 2025, in line with preliminary estimates, and slowing from 0.7% in Q1 as weakness in industry and exports outweighed gains in services. Manufacturing contracted sharply (-2.4%), led by a 4.8% drop in chemicals and pharmaceuticals after a strong Q1 surge tied to US trade policy shifts. Exports fell 2.7% and imports 3.7%. By contrast, services expanded broadly: hospitality (+1.5%), public administration (+1.2%), trade (+1.9%) and healthcare (+0.3%) supported modest domestic demand (+0.1%). Private consumption rose 0.3%, while government spending grew 0.9%. Construction (-0.4%) and equipment investment (-0.8%) declined, reflecting weakness in capital goods, particularly aircraft and R&D. SECO revised its outlook, warning that new US tariffs will weigh on growth. Projections now see GDP at 1.2% in 2025 and just 0.8% in 2026, versus earlier forecasts of 1.3% and 1.2%. While a severe recession is unlikely, certain industries face significant strain.