Swiss Economic Growth Picks Up

Switzerland's gross-domestic-product growth accelerated in the fourth quarter of 2009, adding to recent signs that the country is fast recovering from the global financial crisis., WSJ, Bloomberg 3/2/2010 10:01:07 AM

In the last three months of the year, GDP grew 0.6% on a year-to-year basis—the first increase of the year. The quarterly growth rate was 0.7%, compared with 0.5% in the third quarter, boosted by solid household spending, government economic support measures and good global demand for Swiss goods, the government agency SECO said.

Exports increased 1.6 percent in the fourth quarter after rising 3.3 percent in the previous three months, today’s report showed. Cie. Financiere Richemont SA last month reported an unexpected gain in sales in the three months through December.

Imports rose 0.3 percent after increasing 2.9 percent in the previous quarter. Investment growth eased to 1.4 percent from 3.4 percent, held back by construction, which declined 1.5 percent.

Consumer spending rose 0.4 percent. Switzerland’s jobless rate eased to 4.1 percent in January, which compares with a 9.9 percent rate in the neighboring euro area in January.

Slower growth in the euro region, the biggest buyer of Swiss exports, may curb Switzerland’s recovery this year. The 16-nation economy barely grew in the fourth quarter and may expand only 0.2 percent in the first, second and third quarters, the European Commission forecast on Feb. 25.

The figures were above market expectations for quarterly growth of 0.6% and a contraction of 0.3% on the year. The average rate of contraction was 1.5% for the whole of 2009.

Switzerland's central bank has signaled it is too early to increase rates in the current uncertain environment. The SNB targets 0.25% in the three-month Swiss franc London interbank offered rate—a record low level that has been in place since March 2009.

Any future interest-rate moves in Switzerland will depend on the exchange rate, which has become a key focus of the central bank, economists have said. Switzerland, traditionally a country with trade balance and current-account surpluses, is heavily dependent on its exporting industry. The recent strength of the Swiss franc against the euro, the currency of most of Switzerland's trading partners, makes Swiss goods lose their competitiveness.

Swiss Economic Growth Picks Up