Economic barometer falls to five-year low

Switzerland's leading growth barometer fell to its lowest level since 2003 in July as the export slowdown and banking sector weakness influenced consumer spending.

This content was published on July 30, 2008 - 14:00

The KOF Swiss Economic Institute indicator, which points to the economy's likely performance in six months' time, fell to 0.9 from a revised 0.99 in June.

But the head of KOF, Jan-Egbert Sturm, said on Wednesday that it was "clearly exaggerated to speak of a recession".

He said that although consumption growth was no surprise, it was "far from collapsing".

In a related development, small and medium-sized Swiss enterprises are growing more concerned about their business outlook according to a survey by Switzerland's largest bank, UBS.

The bank's economists also say there are growing signs that the economy will have to be content with more modest growth in the coming quarters.

Most Swiss indicators point to a slowdown of the economy after four years of above-trend growth. The Swiss National Bank sees growth falling to between 1.5 and two per cent this year from 3.1 per cent in 2007.

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