Economy may be sliding faster than thought

The Organisation for Economic Co-operation and Development (OECD) expects the Swiss economy to contract significantly more than predicted in earlier forecasts.

At a meeting in Paris on Wednesday OECD officials issued a report saying Switzerland could expect a 2.7 per cent economic decline in 2009. That is down from an earlier figure of -0.2 per cent. The KOF Swiss Economic Institute in Zurich has predicted a 3.3 per cent drop.

A recovery could also take longer to come than previously thought. Switzerland’s gross domestic product is expected to grow by 0.2 per cent in 2010, the OECD said in its half-yearly report. Previous OECD figures had put the figure at 1.6 per cent.

The report predicts Swiss exports of goods and services in 2009 will drop 14.6 per cent. In 2010, the OECD expects a 1.1 per cent drop. Imports could sink 8.4 per cent in 2009 and 1.4 per cent in 2010.

Despite the grim figures Switzerland appears to be in better shape than OECD member states, who can expect their economies to contract 4.1 per cent this year.

The report said the deepest global recession in more than 60 years could be close to bottoming out as world economic-stimulus plans stave off an even worse decline. The OECD revised 2010 forecasts for worldwide economic growth upwards – based on member states, plus China, India, Russia and Brazil – from 1.25 per cent to 2.3 per cent.

swissinfo.ch and agencies