Economists rule Swiss immigration decision will impact growth

21 Feb 2014 | Posted by Carl Thomas

Economists have said that Switzerland's decision to curb immigration will have a negative impact on the country's economy.

The comments come as UK immigration is once again in the spotlight with discussions of access to benefits and work dominating headlines. However, the comments on Switzerland's decision could inform the UK argument, highlighting the benefits of allowing talented migrant workers to access UK work permits.

A survey conducted by Bloomberg of 21 economists found that 16 respondents believed that the decision by Swiss voters to introduce tighter rules on EU migrants will hurt the growth prospects of the country.

Meanwhile, five respondents said that the limits would have a negligible impact on the economy, but none of the economists said that there would be a positive impact as a result of the decision.

Furthermore, ratings agency Moody's has issued an official warning that the immigration cap – to be set by the Swiss government within the next three years – will hit the economy and the banking sector.

The agency said: “The introduction of labour immigration could reduce housing demand, thereby exerting pressure on residential house prices, and potentially leading a faster-than-anticipated slowdown in residential housing markets.

“In addition, negative repercussions on Swiss-EU trade may put pressure on export-orientated businesses, thereby leading to weaker corporate asset quality.”