Swiss recession shows signs of easing
Swiss forecasting group KOF says the economy is reaching its lowest point.Geneva -- The sharp slowdown in the Swiss economy is showing signs of easing, especially in the banking and construction industries, Swiss forecasting group KOF said Friday.
Although economic growth will remain "pronouncedly negative", KOF said its latest indications for June suggested that the economy "might soon reach its trough as measured by annual GDP (gross domestic product) growth rates."
The monthly measurement by the Swiss Federal Institute of Technology's economic forecasting group is based on a survey of 4,200 companies and measures the likely changes of the Swiss economy over the coming six months.
Construction and banking were already showing "upward movement" into neutral territory, while the other core sectors, which account for 90 percent of Swiss GDP, we close to bottoming out "at a very low level," KOF said.
Exports to the EU were also close to their lowest points but domestic consumption was showing further signs of decline, it added.
Switzerland formally entered recession in the first quarter.
The economy ministry's panel of economists forecast earlier in June that negative growth would continue in 2010 amid a slow recovery from an average growth rate of minus 2.7 percent in 2009.
However, analysts at London-based Capital Economics said the KOF barometer suggested the recession would drop below forecast levels and predicted that Swiss GDP could decline by up to four percent in 2009.
"The economy’s reliance on the financial sector will mean that it takes longer than others to recover and we envisage another 1.5 percent drop in 2010," Jennifer McKeown, European economist at Capital said.
AFP / Expatica