Experts warn economy is heading for slowdown

A group of leading economists has forecast a marked weakening in economic growth in Switzerland over the next two years. They say growth will fall by as much as one per cent during 2001.

A survey of 23 economists, released on Friday, is predicting growth of 2.3 per cent in 2001 and 2.1 per cent in 2002. They also expect export growth to slow to 5.2 per cent in 2001 and 4.7 per cent the year after.

In a statement from Zurich, the Business Economists’ Association, which carried out the survey, said unemployment would continue to fall despite the slowdown, and should stabilise at around 1.8 per cent next year.

The economists also expect inflation to fall to 1.8 per cent next year and 1.6 per cent in 2002.

The Swiss franc is expected to gain in value against the United States dollar over the next 12 months, with an exchange rate of SFr1.59 at the end of December next year.

A similar forecast, predicting slower economic growth, was also released by economists at the Swiss Federal Institute of Technology in Zurich.

The Swiss Institute for Business Cycle Research said in its monthly analysis that the trend should be interpreted as a positive sign for the economy.

Figures released on Thursday by the Federal Statistical Office in Neuchâtel showed that prices in Switzerland rose by an average of 1.6 per cent in 2000 – the biggest increase for five years.

Earlier this month, the Swiss National Bank forecast that the economy would grow by 3.3 per cent this year, 2.2 per cent in 2001 and level off to 1.6 per cent in 2002.

It added that with the anticipated slowdown in growth, the threat of inflationary overheating of the Swiss economy was likely to pass.

The National Bank expects inflation to rise from 1.6 per cent in 2000 to 2.1 per cent in 2001 and to drop again to 1.7 per cent by 2003.

In the bank’s view, an inflation rate of two per cent a year is the upper limit at which price stability can be maintained.

swissinfo with agencies