"Positive contributions to growth in Swiss GDP came in particular from consumption and gross fixed investments while the balance of trade in goods and services had a negative impact"
- The economics department
Can a cap imposed by the Swiss National Bank of the domestic currency be the only panacea from all internal and external risks? It seems that strong domestic consumption cannot boost growth on its own as due to a drop in exports of pharmaceuticals, chemicals and machinery the Alpine country almost stalled in the final quarter of 2013. According to a report from the Federal Statistics Office, Swiss gross domestic product expanded 0.2% in the three months through December from the prior quarter when the growth stood at 0.5%. On a annual basis the economy posted a 1.7% expansion compared with a 2.1% growth recorded earlier. What is more important is that both quarterly and yearly figures fell short of analysts' expectations. Despite the fact shipments fell 1.7% over the corresponding period, the fact manufacturing production has been expanding since May is suggesting the economic momentum is still likely to hold pace. On March 18 Swiss policymakers will update their growth, inflation and unemployment forecasts and keeping in mind latest data there is a possibility for more dovish comments and slightly gloomier outlooks. Currently the Alpine country is projected to grow 2.3% this year and accelerate to 2.7% in 2015.
While it seems the economy is loosing its momentum, Switzerland will hold a referendum whether to impose a minimum wage of 22 francs per hour– world's highest level. In case proposal is accepted, it can have a damaging effect on the nation's labour market.
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