Economic growth shows further signs of strain

Switzerland's leading economic growth barometer has fallen to a five-year low with exports and consumption slowing down.

The KOF Swiss Economic Institute in Zurich said on Friday that its indicator, which points to the economy’s likely performance in six months’ time, fell to 0.68 in August from a revised 0.85 in July.

This was the lowest reading since August 2003 and well below forecasts in a Reuters poll.

“That does not look good,” commented Credit Suisse analyst Fabian Heller. “The export and consumption components are really bad.”

The president of the Swiss National Bank said in a recent newspaper interview that the signs of a slowdown would be more pronounced in the second half of the year and the improvement on the labour market had probably come to a standstill.

In other economic news on Friday, revised data from the Federal Statistics Office showed that the Swiss economy grew more strongly in 2007 than had so far been reported.

Gross domestic product grew by 3.3 per cent in real terms, compared with the 3.1 per cent previously indicated.

The statistics office noted there was strong growth of added value in the financial services sector and in export branches.