Switzerland enters recession in first quarter
The Swiss economy fell 0.8 percent in the first quarter compared with the last of quarter of 2008.Bern – Switzerland officially entered a recession in the first quarter when its economy shrank by 0.8 percent from output in the previous quarter and exports fell sharply, official data showed on Tuesday.
"Negative growth impulses emanated in particular from the foreign trade sector," the Swiss economy ministry said in a statement.
It also revised its gross domestic product (GDP) figure for the last three months of 2008, saying that the economy had shrunk by 0.6 percent instead of 0.3 percent.
A recession is defined as two quarters of GDP contraction in a row.
On a 12-month comparison, Swiss GDP fell even more sharply, down 2.4 percent in the first quarter compared to the same period in 2008.
Analysts had forecast a 12-month contraction of up to two percent, according to Swiss financial news agency AWP.
The contraction was caused mainly by weakness in exports, which fell 5.4 percent.
Exports of goods were particularly hit, down 6.6 percent while exports of services fell 2.3 percent.
Imports were unchanged compared to the previous quarter.
Imports of services fell 1.6 percent but those of goods rose 0.4 percent, thanks to a growth in imports of gold ornaments for melting down.
The Swiss federal customs office had said in March that Switzerland's trade surplus was cut by over 27 percent in the first quarter owing in part to a boom in imports of gold ornaments from Asia which are being melted down and made into bullion.
The office said then that Swiss imports from Asia had risen by 43 percent owing to a surge in the purchase of ornaments from Vietnam, described as an "Asian gold rush".
Meanwhile, the Swiss watch industry had been reporting double-digit declines in watch exports for the past four months.
Bernard Lambard, Bank Pictet's economist took a positive view of the latest GDP figure, describing it as "less serious than expected and it's mostly good news".
"What stands out is that the contraction is much more moderate than the rest of Europe and especially Germany, which confirms that Switzerland is not doing so badly," he said.
The eurozone economy shrank 2.5 percent in the first three months.
However, Lambert warned that Switzerland's recession often worsens later than other countries.
Signs of recovery should appear in the second quarter in the rest of Europe and the United States, he forecasted, but only later in the year in Switzerland.
The International Monetary Fund had forecasted that Switzerland would report a recession of three percent this year, and a contraction of 0.3 percent in 2010.
AFP / Expatica