The Swiss economy is set to achieve only sluggish growth next year, after experts cut their forecasts by a quarter.
BAK Basel Economics says gross domestic product (GDP) will only rise by 1.2 per cent next year. In October BAK predicted a 1.6 per cent growth rate.
BAK Basel Economics said the weak global economy and poor prospects for the Eurozone countries were dampening Swiss hopes of a recovery.
Explaining the revision on Monday, BAK said the outlook was worsening internationally and cited the economies of countries in the Eurozone, particularly Germany, which is Switzerland's biggest trading partner.
The news comes after the Swiss government slashed its growth forecast for next year.
BAK says the economy will stagnate this year, after Swiss hopes of an export-led recovery failed to materialise amid weak global demand.
BAK expects exports to fall by 1.1 per cent for 2002. The drop is likely to wipe out many of the gains from stronger consumer spending which grew by 3.2 per cent.
Exports should recover next year, say the Basel economists, with growth of 3.9 per cent expected.
However, much of those benefits will in turn be erased by falling consumer spending, which accounts for 60 per cent of GDP and is expected to tail off in 2003 amid unemployment fears.
According to the government's latest unemployment figures for November, 3.3 per cent of the working population is out of work, some 120,000 people.
Other factors driving down growth prospects, according to BAK, are poor prospects in the building industry, where investment is expected to drop 1.2 per cent in 2003.
Last month the government cut its growth forecast for next year to just one per cent, down from 1.7 per cent as previously predicted.
The state secretariat for the economy (seco) reported that there was unlikely to be any sign of positive growth in the economy before 2004.
Consumer spending predicted to drop in 2003.
Investment in construction forecast to fall 1.2 per cent.
Seco expects no positive growth before 2004.
BAK has followed the government's lead and revised down its forecast for the Swiss economy.
GDP is expected to grow by 1.2 per cent in 2003, down from 1.6 per cent predicted in two months ago.
Increased unemployment and a weak construction industry are some of the factors contributing to the decline.