Recession in Switzerland moves closer

The Swiss economy stagnated in the third quarter, failing to grow for the first time in four years as companies cut back on investments.

This content was published on December 4, 2008 - 11:20

The State Secretariat for Economic Affairs in Bern said on Thursday that year-on-year growth slowed to 1.6 per cent from 2.6 per cent in the second quarter.

"Switzerland is in or at least on the brink of a recession," commented analyst Jan Poser at Bank Sarasin. "Recent data suggest that the economy is already shrinking."

He said he believed the Swiss National Bank would cut its key interest rate again next Thursday, probably by 50 basis points.

Poser added that Switzerland had been doing better than its main trading partners in the euro zone, which was already in a recession, but the export-dependent country could not escape the slump.

The Swiss National Bank two weeks ago made a surprise 100 basis points cut in the three-month Swiss franc London Interbank Offered Rate to 0.5-1.50 per cent.

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