"As in the previous quarters, positive contributions to growth came primarily from private consumption, while investments in machinery and equipment showed a marked increase for the first time in a year"
- The State Secretariat for Economic Affairs
Following a series of mixed reports from the Alpine country and central bank's projections of a weak second quarter growth, Tuesday's data surprised markets to the upside, as the economy expanded more than expected in the second quarter. Although, Switzerland's economic growth slowed slightly in the second quarter, it outpaced analysts' projections due to solid consumer spending on healthcare and a pick-up in machinery and equipment investments. The State Secretariat for Economic Affairs unveiled Swiss real gross domestic products expanded by 0.5% in the second quarter, down from 0.6% in the prior quarter, however stronger than the median forecast of 0.3% growth. Over the period household final consumption expenditure soared 0.7%, with healthcare being the key factor in the growth of private consumption during the last four quarters. Furthermore, general government final consumption expenditure climbed 0.1%. By contrast, shipments from Switzerland shrank 0.9% in the second quarter. Swiss exporters are still suffering from overvalued Swiss Franc and sluggish growth in the Eurozone- Switzerland's biggest trading partner. Still, the outlook for the economy is underpinned by upbeat data from Europe's powerhouse- Germany, where business climate soared to the highest level in more than a year in August. Moreover, Swiss KOF indicator increased to 1.36 in August, up from July's revised figure of 1.25, cementing expectations Swiss economy will continue building up steam.
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