Switzerland set to avoid recession: agency

Switzerland set to avoid recession: agency
Photopress/Yoshiko Kusano
Switzerland is to dodge recession, a government body said on Tuesday as it lowered its 2012 growth forecast to 1.0 percent, but warned the global slowdown will cause a rise in unemployment.

"The international economic slowdown has also reached Switzerland," the State Secretariat for Economic Affairs (SECO) said in a statement, adding that "dampened economic activity" was expected in coming months.

After a "relatively good" first quarter, SECO said, growth had weakened in the second quarter.

Overall for 2012, the federal department's experts forecast growth of 1.0 percent, compared to the 1.4 percent outlook in June.

It also lowered slightly its position on growth in 2013 from 1.5 percent to 1.4 percent, "contingent upon there being a recovery in the global economy."

But there was no expectation of a "marked" recession, SECO said, thanks to the robust domestic economy which benefited from low interest rates, fallingv consumer prices and high immigration.

In addition, Switzerland's exchange rate mechanism — put in place by the country's central bank to prevent the franc appreciating against the euro beyond 1.20 francs to the euro — had also made "an important contribution" towards helping the "under pressure" export sector, SECO added.

The weakening of the Swiss economy impacted slightly on the labour market in 2012 with the seasonally adjusted unemployment rate rising from 2.8 percent to 2.9 percent in August, SECO's economists said.

Unemployment is likely to rise for the rest of the year "in view of the modest expectations for economic activity" before stablizing in 2013, SECO added.

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