Bloomberg News

Swiss Economy May Not Grow Through First Quarter 2012, BAK Says

October 27, 2011

Oct. 27 (Bloomberg) -- The Swiss economy may not grow through the first quarter of 2012 as a global slowdown hurts exports and investments, the BAK Basel economic research institute said.

The Swiss economy “will probably stagnate from summer 2011 through spring 2012” before strengthening in the second quarter, the Basel, Switzerland-based institute said in an e- mailed statement today. Gross domestic product may rise 1.9 percent this year and 0.8 percent in 2012, it said.

The Swiss economy is showing signs of a deepening slowdown as faltering exports prompt companies to curb spending. Manufacturing output contracted in September for the first time in two years and the Swiss National Bank last month imposed a franc ceiling of 1.20 versus the euro to protect economic growth in the country.

Even with the cap, “prospects for the coming months remain bleak,” BAK said. “The outlook for 2012 is very subdued given the continued euro debt crisis. Negative risks for Switzerland, as for the global economy, remain extraordinarily high.”

Swiss exports may rise 3.6 percent this year and 0.3 percent in 2012, today’s report showed. Equipment spending may increase 3.9 percent and 1 percent this year and next, with consumer demand rising 1.1 percent and 1 percent, respectively. Consumer prices may rise an annual 0.4 percent this year and 0.5 percent in 2012, according to BAK.

--Editor: Matthias Wabl

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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