Swiss government unveils new stimulus

Geneva — The Swiss government on Wednesday approved a third, CHF 750 million (EUR 498 million, USD 690 million) economic stimulus package amid signs that the recession could continue into 2010.

"Since February 2009, when the decision to launch the second round of measures was taken, the outlook for the Swiss economy has continued to deteriorate," the economy ministry said in a statement after a cabinet meeting.

Switzerland formally entered recession in the first quarter when its economy shrank by an additional 0.8 percent, according to figures released at the beginning of June.

The latest forecast from the ministry’s panel of economists released Wednesday indicated that negative growth was expected to continue in 2010.

The Swiss economy is now likely to contract by minus 2.7 percent in 2009, instead of 2.2 percent, and by minus 0.4 percent in 2010 instead of growing by 0.1 percent.

The third stimulus package was aimed at "softening the consequences of the recession and encouraging a return to growth," the statement said.

The additional cash injection "will amount to CHF 750 million," it added.

The bulk of the package, about CHF 400 million, was aimed at tackling unemployment, which is expected to reach an average of 5.5 percent in 2010.     

The rest included support for innovative small- and medium-sized businesses, CHF 200 million to cut the cost of personal health insurance and CHF 150 million to reform Value Added Tax (VAT).

The Swiss government launched its first CHF 890 million stimulus package in November followed by a second round of CHF 700 million in February.

AFP / Expatica