"An appreciation of the CHF would compromise price stability and would have serious consequences for the Swiss economy"
- The Swiss National Bank
The Swiss economy experienced a temporary revival in the beginning of this year, expanding by 2.3% in the first quarter. While domestic sentiment, private consumer spending and construction investment registered a positive trend, signals from abroad remained weak, the Swiss National Bank said in its quarterly bulletin. Even though foreign trade contributed to growth substantially, it was only due to a marked decrease in imports, while equipment investment declined as well.
The robust improvement in the economy suggests the negative output gap is narrowing, with capacity utilization in the manufacturing sector edging higher. However, the situation in the labour market deteriorated even further, leading to another rise in unemployment figures in spring. According to SNB's estimates, the economy should decelerate significantly in the second quarter, and afterwards the economic activity should start gaining pace, supported by developments in the global economy. For the whole 2013, the SNB expects the GDP growth of 1.0-1.5%. At the same time, it is widely expected that the economy will benefit from industries with a domestic focus. However, sluggish economic performance of the Eurozone has dampened the mood of Swiss exporters and is likely to weigh on the overall economic output in the nearest future.
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