The Swiss National Bank says the economic outlook for Switzerland for the near future is "anything but bright" but initial signs of stabilisation are appearing.

In a speech on Friday to the annual shareholders' meeting in Bern, the bank's president, Jean-Pierre Roth, warned that economic recovery would be a slow process because current difficulties were more than just cyclical.

"They are partly the result of a profound crisis of confidence in the soundness of the financial sector and the future growth potential of the global economy," he said.

Roth told the meeting that 2009 would see the steepest decline in Switzerland's GDP since 1975, shrinking between 2.5 and three per cent.

"Exports, normally the driving force of our economy, will continue to be weak, and the lack of confidence in the corporate sector will weigh on investment demand."

He said the bank had taken "rapid and decisive" measures to ease its monetary policy, noting that it had cut its three-month key interest rate to 0.25 per cent in efforts to weaken a rising Swiss franc.

Roth said all industrialised countries were faced with a similar downturn, particularly those with high exposure to foreign trade.

However, he said he was "confident" Switzerland could deal with the situation, citing its competitive export sector, good results posted by companies in recent years, flexibility and satisfactory public finances as positive factors.

swissinfo with agencies

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