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Economy shows modest growth

Growth has been built on the construction sector


Switzerland's Gross Domestic Product increased by 0.3 per cent in the second quarter of this year, led by strong exports and the construction sector.

The State Secretariat for Economic Affairs (Seco) said on Friday that it sees light at the end of the tunnel, with the economic cycle having recovered from its lowest point.

The result followed a 0.2 per cent rise from the first quarter, which was revised upward from 0.0 per cent. The year-on-year increase was 1.1 per cent.

In a statement, Seco said "the expansion in the second quarter was broadly based and was supported both by domestic and foreign demand".

Exports grew by 5.8 per cent in the quarter and 6.3 per cent over the same period last year.

Capital investments increased by 3.6 per cent in the quarter, led by the construction industry which reported growth of seven per cent.

Private consumption

Private consumption was also slightly above the average at 0.4 per cent, or 1.5 per cent higher than last year.

The office said it expected "further consolidation" in the second half of the year "but hardly a strong acceleration of the Swiss economy".

However, Seco warned of risks, including "the expansion in the euro zone which is still fragile and higher crude oil prices".

"The numbers are in line with our expectations," said analyst Roland Kläger of Credit Suisse.

"They confirm the modest recovery in the second quarter, significantly driven by exports, which contrasts with the previous quarter," he told Reuters news agency.

swissinfo with agencies

Key facts

GDP increased in the second quarter of 2005 by 0.3% compared with the first quarter.
It rose 1.1% compared with the same period last year.
Growth was led by goods exports (7.8%) and the construction industry (7%).
Seco forecasts growth of 0.9% for the year.

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