"An appreciation of the CHF would compromise price stability and would have serious consequences for the Swiss economy"
- The Swiss National Bank
Sales at Swiss retailers fell sharply in May, indicating uncertainty among consumers and suggesting they are now less confident about economic future and are showing unwillingness to increase spending, the Federal Statistics Office said Tuesday. According to the report, the nation's retail sales grew by real 1.8% in May from the prior year, following a 3.1% gain in the month earlier. Excluding volatile sales of fuel, retail turnover surged 2% annually, weaker than a 3.3% growth in the prior month. The main drag on retail sales was a weak demand for food, drinks and tobacco, where sales fell 0.3%, offsetting a 2.8% increase in sales in the non-food sector. Retail sales are the primary gauge of consumer spending, which accounts for the majority of overall economic activity and the improvement is adding to signs the economy will continue gathering pace.
Recent data is adding to signs the economy is likely to slow in the second half of the year. 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.
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