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Business federation gloomy about outlook

The outlook for 2012 is bleaker than previously thought, according to the Swiss Business Federation, economiesuisse.

In a forecast presented to the media on Monday, it says the strong franc, continuing European debt crisis and the faltering world economy will bring the country to the brink of recession.

It is now predicting an increase of only 0.5 per cent in gross domestic product (GDP) next year, whereas in June it expected 1.7 per cent. It has also revised downwards its growth forecast, from 2.1 to 2.0 per cent.

In the last quarter of 2011 and the first quarter of 2012 it even believes growth will stay around zero.

Not only export industries, but also their suppliers are affected by the strong franc, the federation says. It expects more jobs in these areas to be outsourced.

Nevertheless, it does not expect a dramatic rise in unemployment, which it expects to see at 3.6 per cent.

It says public spending and the immigration of workers will have a positive effect on private consumption, homebuilding and publicly funded civil engineering works.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR