The chairman of the Swiss National Bank (SNB) has ruled out a sharp economic upswing in Switzerland in 2003.
Speaking on Friday at the bank's annual general meeting, Jean-Pierre Roth warned that geopolitical and economic uncertainties were continuing to stifle growth.
"The risks of a renewed worsening of the situation in Switzerland and abroad remain and are not to be underestimated," said Roth.
In a downcast assessment of the months and year ahead, Roth warned that Swiss firms faced worsening trading conditions and that the government would have less money.
"Compared to the previous year, conditions for our companies have worsened," said Roth, pointing to lower consumption.
Roth predicted that growth during 2003 would be weaker than the bank had anticipated at the end of 2002.
Swiss growth slowing
Roth's comments came as the Organisation for Economic Cooperation and Development (OECD) released its latest outlook for Switzerland.
It warned that the country's economy remained threatened by a delayed upturn in economic conditions abroad.
"The recovery of activity depends on how the international environment evolves, though it will not come before the second half of the year," said the OECD.
The OECD forecast GDP growth of just 0.6 per cent, rising to 1.9 per cent in 2004.
The organisation urged the SNB to maintain near-zero interest rates until an upturn in the global economy helped spur Swiss exports.
Glimmer of hope
But despite the grim picture, Roth said there were some signs of hope.
He said Switzerland was in a better position to profit from a global upswing than in previous years, largely because of improved competitiveness.
But the threat of further shocks to the Swiss economy from international factors remained real, he said.
The country could again be hurt by a rising Swiss franc, which would have a negative impact on exports.
Roth reiterated the banks' willingness to intervene in foreign exchange markets should the franc jump further.
He also dismissed critics who accused the bank of doing too little to protect the franc.
Roth also took the opportunity to attack a number of structural issues, such as cartels, competition policy and administrative red tape, which he said remained a barrier to stronger growth.
"Switzerland must... undertake greater efforts to liberalise its domestic market in order to achieve sustained growth and ensure the long-term survival of its social institutions," he said.
swissinfo with agencies
The Swiss National Bank is one of only three European central banks listed on the stock exchange.
The OECD forecast GDP growth in Switzerland during 2003 of 0.6 per cent, rising to 1.9 per cent in 2004.
The OECD added that the global downturn and a high franc are the two biggest threats to Swiss growth.