Economy set for upswing in 2000

Switzerland’s economy will enjoy an upturn next year buoyed by a recovery in Europe and Asia, according to the latest forecast by Credit Suisse experts. Gross Domestic Product is set to rise to 2 percent next year, say the experts.

Switzerland’s economy will enjoy an upturn next year buoyed by a recovery in Europe and Asia, according to the latest forecast by Credit Suisse experts. Gross Domestic Product is set to rise to 2 percent next year, say the experts.

At a news conference in Zurich Monday, CS experts said GDP would start the new millenium with an increase of 2 percent on the back of an economic upturn in Europe.

They singled out Germany, Switzerland’s largest export partner, as likely to post srong growth. Swiss exports will benefit from the upswing, and their current growth rate of 2.7 percent this year is expected to grow to 4.5 per cent in 2000, says CS.

International demand for consumer and production goods will rise, and Swiss exports are unlikely to be harmed by the relatively high Swiss franc exchange rate.

In the current year, GDP is set to stand at 1.1 percent, according to the forecasters. Unemployment, wich currently stands at 2.7 percent, will drop to 2.4 percent next year.

An inflaton rate of 1.1 percent is forecast for next year, compared to 0.8 percent likely this year.

Real spending power is expected to rise by 1.5 percent nex year, providing inflation keeps within these parameters, taxes remain at a similar level and there are below-average increases in health insurance premium costs, says CS.

Looking further ahead, CS says GDP could reach 2.5 percent in 2001. It warns that a new round of pay increases could trigger higher inflation.

The Credit Suisse figures confirm a positive trend forecast last week by a Basel-based economic research team. It predicted a 1.9 percent GDP growth rate for 2000, and did not rule out a possible 2.5 percent growth if the world economy continues to rebound.

It predicted inflation would rise to about 1.5 per cent next year, adding that in common with other countries, interest rates are also set to rise.

From staff and wire reports.