- Felix Brill, senior economist at Wellershoff & Partners Ltd.
Switzerland's economy unexpectedly stalled in the three month through June, as faltering growth in the Euro area curtails exports of the Alpine country's industrial goods. Swiss GDP reported no growth in the second quarter compared with the previous three-month period, when the nation's economy expanded 0.5%. This marked the worst economy's performance in two years. Economists, in contrast, had expected a 0.6% sequential growth. Nevertheless, the Alpine economy grew 0.6% when measured against the same quarter a year earlier, SECO said. The economic stagnation underscored Switzerland's dependence on the EU, as the country sells about 56% of its exports to the region. Export growth slid to 0.6% from 2.3% in the first quarter. The data also showed consumer spending expanding only 0.2%.
The data comes ahead of a quarterly Swiss National Bank meeting on September 18. With interest rates already near zero and a three-year-old cap on the Swiss Franc still in place, experts say there is little the central bank will be able to do to boost growth and that it is likely to lower its forecasts for the economy this year. The SNB currently projects GDP growth of about 2% for 2014, although President Thomas Jordan recently said weakness in Europe and South America has increased downside risks for the Swiss economy.
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