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Economic growth at new high despite slowdown in fourth quarter

Swiss economic growth hit a 10-year high in 2000

(swissinfo.ch)

The Swiss economy grew by a slower annualised rate of 2.5 per cent in the fourth quarter of 2000, according to the latest government data. However, the rate of economic growth for the year as a whole reached a 10-year high.

Economic growth slowed in the final three months of last year from an increase in gross domestic product (GDP) of 3.6 per cent year-on-year in the third quarter of 2000.

Analysts had expected GDP growth of between 2.2 and 3.2 per cent in the final quarter of last year.

The figures released by the State Secretariat for Economic Affairs on Thursday showed that full year economic growth for 2000 accelerated to a ten-year high of 3.4 per cent from 1.5 per cent in 1999.

However, a government advisory panel said it now expected economic growth in Switzerland of around 2.25 per cent in 2001.

"Last December's estimate of a gain in real economic growth in Switzerland of about 2.25 per cent over the course of 2001 is still seen as attainable," the Commission on Economic Policy, an advisory panel of economists from the private and public sector, said in a statement.

The Swiss National Bank (SNB) said the slowdown in the rate of Swiss economic growth seen in the fourth quarter of 2000 reflected a return to a more normal rate.

"What we see is confirmation that the full year would be very good but with a slowdown in the last quarter in a way that can be called a return to normal levels," said SNB spokesman Werner Abegg.

Abegg declined to comment on possible implications for Swiss interest rates ahead of the central bank's quarterly monetary policy statement, due on March 22.

During the fourth quarter of 2000 growth in private consumption slowed to 0.9 per cent year-on-year, from an annualised increase of 2 per cent in the third quarter.

However, capital investment increased by 6.7 per cent in the final three months of 2000, up from a growth rate of 5.7 per cent in third quarter.

The Swiss franc moved little against the dollar and the euro even though slower economic growth overall was seen as giving the central bank more room to cut Swiss interest rates in the months ahead.

An economist at Credit Suisse First Boston said he expected a rate cut of at least 25 basis points later this month. The central bank currently has a target range of 3.0 to 4.0 per cent for three-month Swiss franc LIBOR.

swissinfo with agencies


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