Economy shifts up a gear

The Swiss economics minister, Pascal Couchepin, is upbeat about the economic outlook Keystone Archive

Prospects for the economy appear to be rosier than was thought, after the leading economic indicator jumped unexpectedly in July.

Switzerland’s top economic research institute said the economy was on an upward path, although it was likely to slow towards the end of year.

“The stagnation seen last month in the indicator was of short duration because the latest cyclical data provoke a renewed slightly positive trend,” said the Swiss Institute for Business Cycle Research.

The upbeat assessment was echoed by the Swiss economics minister, Pascal Couchepin, in a newspaper interview. He predicted that the Swiss economy would be performing well by the middle of next year.

No complaints

Couchepin told the German-language “Blick” newspaper that the Swiss had “no reason to complain” about the economy, which he described as being in good shape.

“If unemployment figures in Germany were as low as they are in Switzerland,” Couchepin said, “Chancellor Schröder would have no problems being re-elected.”

In the interview, the economics minister ruled out any government support for ailing businesses or sectors – “I am not the mother of all Swiss,” he commented. He reiterated that he intended to push ahead with liberalising agriculture despite protests from farmers.

Strong franc

The latest economic data had indicated that economic recovery might be delayed due to the strong Swiss franc and the impact of a weak global economy.

Just last week, the government slashed its own growth forecast for the year by half a per cent to 0.5 per cent, and reduced its inflation forecast from one to 0.6 per cent.

The Institute for Business Cycle Research said the reading for July leading indicator was minus 0.27 versus a revised minus 0.31 in June, and 0.38 in May.

Analysts at UBS Warburg had expected deterioration to minus 0.73 per cent. The previous June reading was minus 0.71, compared with a May reading of minus 0.70.

swissinfo with agencies

Economy facts

The leading economic indicator jumped unexpectedly in July.
The economics minister predicts an upturn by the middle of next year.
Recent economic data had indicated that a recovery might be delayed.