• Switzerland's news in English
Experts cut Swiss economic growth outlook
Roche plant in Basel: Swiss chemical and pharmaceutical exports fell three percent in first quarter. Photo: AFP

Experts cut Swiss economic growth outlook

The Local · 16 Jun 2015, 10:50

Published: 16 Jun 2015 10:50 GMT+02:00

Facebook Twitter Google+ reddit

The group now expects that Switzerland’s Gross Domestic Product (GDP) will expand by 0.8 percent in 2015, down from the 0.9 percent rate it predicted in March, the State Secretariat for Economic Affairs said.

The downward revision comes after the Swiss economy contracted by 0.2 percent in the first quarter of the year but the experts say they do not expect it to fall into a recession.

The negative growth was in part due to the appreciation of the franc after the Swiss National Bank decided in January to stop intervening in foreign currency markets to prevent it from strengthening, Seco said.

The rouble crisis in Russia, linked to unrest in Ukraine, and uncertainty about the eurozone because of Greece’s debt problems have helped boost the franc, traditionally seen as a safe haven currency in troubled times.

In the first quarter, strong domestic spending boosted the economy but this was offset by a decline in certain export sectors, Seco said.

“Chemical and pharmaceutical exports, which do not react strongly to exchange rate fluctuations, fell by three percent during the first quarter, while investments in the construction industry, which were positive in the first quarter, also began to lose growth momentum,” the secretariat said.

“The expert group expects an adaptation of the economy to the new exchange rate environment without falling into a severe recession.”

Seco cautioned that this was dependent on continued robust domestic spending and further recovery of the global economy.

The group has also revised downward its forecast growth for the Swiss economy in 2016 to 1.6 percent from 1.8 percent, with a “gradual improvement” over the coming quarters.

It expects unemployment to average 3.3 percent this year, while it predicts this will now rise to 3.5 percent in 2016 (up from 3.4 per cent forecast in March) with the greatest impact in German-speaking Switzerland.

The experts say that external issues remain worrying and could impact forecasts dramatically.

Story continues below…

If Greece is unable to find a solution to finance its debt and an “extreme solution is envisaged” — presumably an exit from the eurozone — the franc would continue to strengthen against the euro.

A temporary solution to the crisis combined with a stronger expected recovery in the eurozone “should facilitate a depreciation of the franc in relation to the euro”.

A strong francs hurts Swiss exporters by making their products more expensive to foreign customers.

For more news from Switzerland, join us on Facebook and Twitter.

The Local (news@thelocal.ch)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Swiss woman wins headscarf court battle
Photo: Jack Guez / AFP file picture

A Swiss court has ruled against a company that fired a longtime employee after she began wearing the Muslim headscarf, marking one of the first such rulings in Switzerland, media reported Sunday.

Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Inside Switzerland’s largest nuclear bunker – 40 years on
Designed to house 20,000 people, the bunker was built in and over two motorway tunnels. Photo: Unterirdisch Ueberleben

The Local takes a tour of the Sonnenberg bunker in Lucerne, opened 40 years ago at the height of the Cold War.

Ten Swiss ski resorts named most expensive in Europe
File photo: Renato Bagattini/Swiss Tourism

Skiers in Switzerland pay the highest prices for their ski passes of anywhere in Europe, according to research.

Eco group fights Bern over wind farm plans
There are currently more than 30 wind farms in Switzerland. Photo: Alpiq

Wind turbines are “gigantic and destructive” machines, says Paysage Libre Suisse.

Vegan wins battle to be accepted by Swiss army
Antoni Da Campo will now carry out his military service. Photo: Antoni Da Campo

A Swiss man who was told he would not be accepted for military service because of his strict veganism has finally succeeded in making the army change its mind.

Sponsored Article
How to vote absentee from abroad in the US elections
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Sponsored Article
How to vote absentee from abroad in the US elections
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Photo: File
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Muslim pupils must shake hands – ‘no ifs and buts’
jobs available