Gross domestic product contracted 0.3 percent from the first quarter, when it fell a revised 0.9 percent, which was the biggest decline since 1991, the State Secretariat for Economic Affairs in Bern said.
The data adds to evidence from across Europe that the worst of the recession may have passed. The German economy, Switzerland’s largest export market, unexpectedly grew in the second quarter. As the Swiss economy continues to face the threat of rising unemployment and deflation, Swiss National Bank Governing Board member Thomas Jordan said it isn’t time yet” for the SNB to reverse its expansionary policy.
Investment rose 1.1 percent after a 1.5 percent drop in the previous quarter and private consumption increased 0.6 percent. The decline in exports eased to 2.7 percent in the second quarter from 6.4 percent in the previous three months. From a year earlier, GDP fell 2 percent in the second quarter.
Swiss exports plunged earlier this year as the global recession curbed demand for chemicals, watches and machinery. Data in the last month have signaled the worst may have passed, with a manufacturing gauge and an index of leading economic indicators both rising to nine-month highs.
Unemployment rose to 3.9 percent in July, the highest in almost five years, which may keep consumer spending in check. Textile machinery maker OC Oerlikon Corp., suffering from slumping demand in Turkey, India and China, last week reported a first-half loss and said it would fire an additional 2,500 employees.
The SNB forecasts that the Alpine country’s economy will shrink as much as 3 percent this year, which would be the steepest decline since 1975.