(Bloomberg) -- Swiss economic growth accelerated less than forecast at the start of the year, with household consumption barely registering an increase.

Gross domestic product rose 0.3 percent in the three months through the end of March after a revised 0.2 percent in the final quarter of 2016, the State Secretariat of Economic Affairs said on Thursday. While that’s less than the median forecast of 0.5 percent in a Bloomberg survey of economists, it still is the strongest quarter since mid 2016.

For years Switzerland has been battling fallout from the strong franc, which has pressured exports and crimped corporate profit margins. The domestic economy has helped underpin growth, though an improving euro area could give Swiss momentum a fillip by boosting foreign demand.

“Growth was largely driven by manufacturing, while service sector performance varied widely,” the SECO said. “Value added rose in healthcare and social work activities, but dropped in retail services, in financial services and in certain other service sectors.”

Consumption of private households grew just 0.1 percent in the period, “substantially below its long-term average,” the SECO said. Government demand rose 0.4 percent, while investment in equipment was 1.7 percent higher. Exports of goods increased at an above-average rate of 3.9 percent, it said.

--With assistance from Joshua Robinson and Joel Rinneby

To contact the reporter on this story: Catherine Bosley in Zurich at

To contact the editors responsible for this story: Fergal O'Brien at, Zoe Schneeweiss

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