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Consumer sentiment hits five-year high

Swiss can shop this Christmas until they or the economy drops

(swissinfo.ch)

Swiss consumers have become more upbeat over the past few months - good news for retailers as the findings come at the start of the Christmas shopping season.

The State Secretariat for Economic Affairs (Seco) said on Thursday that the consumer sentiment index rose to +13 points in October from +12 in July.

Before the start of the year, the index was at –15 points and entered the plus zone in January for the first time in 17 quarters.

"Economic conditions improved for the fourth time in a row," Seco said in a statement. Those surveyed were less concerned about losing their jobs and more inclined to buy big items like furniture or cars.

But the survey of around 1,100 households also showed the Swiss took a less optimistic view on their current and future finances.

Seco economists said the indictors showed a certain flattening out meaning that the high point had probably already been reached or surpassed.

And bank analysts had forecast better results, expecting the index to rise to as much as +15 points.

"But it is still an improvement from the previous quarter and combined with the strong development in the labour market it does support the view that private consumption will support the Swiss economy as export growth weakens in line with slower growth in the global economy," Crédit Agricole analyst, Henrik Gullberg, told the Reuters news agency.

Slowdown

Economists expect the Swiss economy to slow next year from growth of around three per cent this year, and a stronger slowdown in consumer data.

"Switzerland is too dependent on exports to escape the global slowdown," said Alessandro Bee, an analyst from Bank Sarasin.

"Consumption is no driver of growth, it's following the overall economic development. We expect growth to slow to 1.5 per cent next year."

Experts say one reason could be consumers' belief that prices will rise more strongly over the next 12 months, making it more difficult to save.

swissinfo with agencies

In brief

The Consumer Sentiment Index is compiled quarterly by the State Secretariat for Economic Affairs (Seco).

Since 1972, Seco has surveyed 1,100 households on various issues, including price developments and job security.

They are also asked to give their opinion on the general state of the economy over the previous 12 months, their own financial situation during the same period and how they think it will develop over the coming year.

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