Swiss GDP rises 1% in Q4

Switzerland's economic expansion unexpectedly accelerated to the fastest pace in more than two years in the fourth quarter as companies increased construction., Bloomberg 3/4/2008 6:54:41 AM

Gross domestic product rose 1 percent from the third quarter, when it grew 0.9 percent, the State Secretariat for Economic Affairs said today in Bern. That's the fastest expansion since the three-month period through June 2005.

Switzerland's economy, Europe's eighth largest, gathered momentum at a time when growth is slowing in the U.S. and the euro area, two of the largest markets for exports. The expansion may wane this year as a global slowdown damps foreign demand.

Export growth slowed to 0.3 percent from 2.5 percent, today's release showed. Investment in equipment fell 0.6 percent, declining for a second straight quarter. Household consumption grew 0.4 percent after 0.8 percent. Construction increased 1.8 percent in the three months through December after declining in each of the three previous quarters.

From a year earlier, the economy grew 3.6 percent in the three months through December, the fastest pace since 2000. Full- year growth will probably be about 2 percent in 2008 after 2.5 percent in 2007, the central bank estimates.

The highest rate of growth the Swiss economy can sustain without pushing up inflation, the so-called potential rate, is about 1.9 percent, the Organization for Economic Cooperation and Development in Paris has said.

Inflation held at a 14-year high of 2.4 percent in February, as the franc's gains since the start of the year were unable to fully offset a surge in the cost of oil and record food prices, the Federal Statistics Office said today. Retail sales in December rose for the 19th month in a row.

Swiss GDP rises 1% in Q4