Swiss economy exceeds expectations
25 May 2011, 13:26
Published: 25 May 2011 13:31 GMT+02:00
Updated: 25 May 2011 13:26 GMT+02:00
The Swiss economy has been developing robustly, and under its own steam, according to the report published Wednesday.
The Swiss GDP is expected to grow by all of 2.7 percent this year, thanks to increased domestic demand, while the OECD also predicted an increase of 2.5 percent for 2012.
This represents a significantly more optimistic prognosis than in previous reports. Back in November 2010, the OECD only expected the Swiss economy to grow by 2.2 percent this year.
The higher domestic demand is thought to have been driven mainly by low interest rates, but the excellent job market has also apparently boosted the economy. The OECD says that unemployment in Switzerland will sink to 4.1 percent this year, and that figure will shrink even further to 3.9 percent next year.
There could be a slight increase in inflation soon, the OECD warned, but it will remain low in comparison with other countries – this year's estimated inflation rate of 0.7 percent is likely to rise to 1.1 percent next year.
The Swiss National Bank (SNB) is also expected to keep the housing market in check by gradually increasing key interest rates.
According to the OECD's analysts, the only black spot on Switzerland's economic horizon is the growing strength of the Swiss franc. Should the franc's value continue to increase, the OECD warns, Swiss exports could start feeling the pinch.