The Swiss economy is showing further signs of a recovery, the government said today, after it raised its outlook for 2013 growth. Switzerland is benefiting låna 400000 from strong domestic demand and recovery should be helped further as the outlook for the euro zone brightens.
“The international environment has improved slightly for the Swiss economy during the course of 2013. For the first time since several years upward risks are more likely to occur,” economists at the State Secretariat for Economics (SECO) said. “Stronger demand from key Swiss sales markets would give the export industry an additional impetus and would give the export industry and additional impetus and could further accelerate the recovery in the Swiss economy.” The SECO raised its forecast for growth in 2013 to 1.8 percent from the 1.4 percent predicted in June and also lifted its outlook for 2014 to 2.3 percent compared to 2.1 percent previously. Growth in the Swiss economy came in at a better-than-expected 0.5 percent in the second quarter, driven by private consumption and spending on machinery.
The SECO noted, however, a disparity between a robust domestic economy, supported by strong private consumption, and the slow recovery of exports, held back by the strong franc, a weak euro zone and a slowdown in emerging markets. It said a setback to structural reforms in the euro zone and turbulence on the international financial markets as highly expansive monetary policy is unwound could still pose a risk for the global economy and should not be ignored. Separately, data on Thursday showed Swiss exports fell in August on declining trade with the European Union. Still, a stronger economy should help reduce the number of jobless, the SECO said, revising down its forecast for Swiss unemployment to 3.2 percent for 2013 and 2014 from a previous 3.3 percent.
It stuck to its forecast for consumer prices to fall by 0.1 percent this year and raised its prediction for inflation of 0.3 percent next year, up from the 0.2 percent forecast in June. An extended flirtation with deflation driven by the huge gains made by the Swiss franc drove the Swiss National Bank to establish a 1.20 per euro cap on the safe-haven currency two years ago. With inflation still extremely low and the global economy recovering, some analysts have begun to speculate the cap may prove increasingly unneeded as the franc could finally now start to weaken. The bank announces its latest rate decision later today.