Swiss central banker sees stabilisation
Roth says the economy is recovering from a sharp decline.GENEVA - The Swiss economy is showing signs of stabilising following a sharp downturn, Switzerland's top central banker said Friday, although he warned that 2010 would still be a "difficult year."
"In Switzerland, initial signs of stabilisation are appearing here and there, and the decline in GDP should gradually become less steep in the near future," Jean-Pierre Roth, the chairman of the Swiss National Bank's governing board said.
"But a true reversal of trend is unlikely to occur before next year and recovery will be a slow process, since the current difficulties are more than just cyclical," he added at the annual general meeting of the central bank's shareholders.
Export-dependent Switzerland is expected to fall into a deep recession 2009, with the economy projected to shrink 2.2 percent, before a slight recovery in 2010, the Economy Ministry forecast.
Roth said, "2009 will be a difficult year for our economy, and the signs are that 2010 will be so too because, even if the downward trend is halted, the under-utilisation of our production resources will still be considerable."
The recovery would produce slower growth than in the past, but this would make it "all the more sustainable," he added.
Roth also warned that the factors that caused the current crisis, excessive borrowing and low interest rates, are now the same tools used to stimulate the economy.
"Once the economy is back on track, the prime political and economic challenge will be to put in place the corrective measures needed to ensure a more balanced course in future," said Roth.
AFP / Expatica