Economy picks up in second quarter

Switzerland's economy regained some momentum between April and June as consumer spending and solid exports outweighed a drop in company investment.

The State Secretariat for Economic Affairs in Bern said on Tuesday that gross domestic product grew by 0.4 per cent compared with the first quarter of 2008, and by 2.3 per cent compared with the second quarter last year.

In a related development, inflation eased to 2.9 per cent in August from a 15-year high the previous month. The Federal Statistics Office said the fall was largely thanks to lower oil prices.

“The breakdown confirms that Swiss domestic demand remained very strong, in contrast to euro zone neighbours, which saw a contraction in GDP in Q2,” commented 4Cast market analyst Saara Tuuli.

“Recent figures as well as survey data point to the second half of the year being weaker than the first, yet 2008 growth is likely to come within the Swiss National Bank’s range of 1.5–2 per cent.”

The president of the SNB, Jean-Pierre Roth, said in a recent newspaper interview that the central bank still expected inflation to ease over the coming months as oil and commodity prices stabilised.