Bloomberg News

Schneider-Ammann Says There’s ‘No Talk’ of Swiss Recession

October 27, 2011

(Updates with additional comments in second paragraph.)

Oct. 27 (Bloomberg) -- Swiss Economy Minister Johann Schneider-Ammann said while there’s “no talk of a recession” in Switzerland, companies are still struggling with the current exchange rate after the central bank imposed a franc limit versus the euro.

“I’m hoping that the environment will stabilize,” Schneider-Ammann told reporters before an event in Zurich today. “Even at 1.20, we’re still far away from purchasing power parity, which is considerably higher. We have a lower limit, which is giving companies some planning security.”

The Swiss central bank to imposed a franc ceiling last month as the euro region’s worsening debt crisis prompted investors to pile into the currency, which is considered a haven in times of turmoil. While the cap has prevented the franc from strengthening, the Swiss economy is showing increasing signs of slowdown.

Schneider-Ammann said while the economy is in a “difficult environment,” there’s “no talk of a recession.”

In the text of a speech delivered in Zurich, he said that one of the challenges for Switzerland is “dealing with the prevent overvaluation” of the franc. He didn’t elaborate.

The BAK Basel economic institute said today the economy may fail to grow through the first quarter of 2012, calling prospects for the economy “bleak.” Swiss gross domestic product may rise 1.9 percent this year and 0.8 percent in 2012, the Basel, Switzerland-based institute forecast.

--Editor: Fergal O’Brien

To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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