Swiss say economy to expand in 2010

23rd September 2009, Comments 0 comments

Switzerland improved its economic forecast Tuesday for 2010 even as unemployment is expected to rise.

Bern -- Switzerland on Tuesday raised its forecast for 2010, saying that the economy would expand rather than contract even though unemployment was expected to rise further.

"Next year, economic recovery in Switzerland will continue, in the opinion of the expert group, but ... will lack major momentum," the State Secretariat for Economic Affairs said in a statement.

It said it now expected Gross Domestic Product (GDP) to expand 0.4 percent in 2010, instead of the 0.4 percent contraction predicted in June.

For 2009, it also raised its forecast from a contraction of 2.7 percent to a fall of 1.7 percent following a stronger than expected recovery in recent months.

The Swiss central bank earlier upgraded its 2009 forecast to show the economy contracting by between 1.5 and 2.0 percent rather than the 2.5 to 3.0 percent range given in June.

The state secretariat said the 2010 growth will be weak and is likely to lose momentum after the initial gain.

"It is assumed that the international economy, after its first strong recovery, will run out of steam again in the course of 2010 which will also limit further economic recovery in Switzerland," it said.

It also warned that unemployment was expected to rise from 3.8 percent in 2009 to 5.2 percent in 2010.

"As a consequence of the economy only slowly picking up momentum, prospects for the labour market remain bleak," the secretariat added.

Meanwhile, the Finance Ministry said in a separate statement that the country's trade surplus rose 25 percent to CHF 1.8 billion (EUR 1.2 billion, USD 1.76 billion) in August amid a "marked decline in imports against exports."

Exports fell 14 percent from 2008 to CHF 12.96 billion while imports fell 18.1 percent to CHF 11.18 billion.

AFP / Expatica

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