Swiss economy slides towards recession

The machine industry has been particularly affected by the economic slowdown Keystone Archive

Economic growth in Switzerland has slowed to its lowest rate for three years, with a performance way below expectations.

The State Secretariat for Economic Affairs in Bern (Seco) announced on Thursday that GDP grew by only 0.1 per cent in the third quarter compared with the previous three months.

Seco said that compared with the corresponding quarter last year, real growth from July to September was 0.8 per cent.

That growth was chiefly supported by consumer spending, Seco said in a statement, with household consumption increasing by 2.2 per cent in the third quarter.

The machine industry, the leading pillar of exports, as well as precision instruments and utility vehicles, were particularly hard hit by the downturn.

Earlier this week, analysts told the Swiss News Agency that they were expecting GDP to grow by 0.5 per cent compared with the previous quarter and 1.4 per cent compared with the situation a year ago.

Seco observed that the clear cooling down of the world economy and the stronger Swiss franc had put a damper on growth.

It added that the global economy would remain weak until growth in the United States picked up, which it was expected to do during the course of 2002.

“It’s possible that there will be negative growth in the fourth quarter of 2001 and the first quarter of 2002,” commented analyst Bernard Lambert from the Pictet Bank.

No longer an island

Economist Janwillem Acket at the Julius Bär Bank said the latest figures showed that Switzerland was no longer an island.

He explained that growth in the first six months of this year had been clearly above that of other European countries and the United States.

Economic experts at Seco continue to forecast GDP growth of 1.6 per cent this year. They expect growth to be 1.3 per cent next year and 2.0 per cent in 2003.

The Swiss National Bank is forecasting economic growth of 1.5 per cent for this year and one per cent in 2002.

swissinfo with agencies