The business week in Switzerland

On Wednesday French supermarket chain Carrefour announced it was strengthening its position in the Swiss market Keystone

The week was dominated by a clutch of news about the Swiss economy.

Friday’s data followed a report from the Swiss Institute of Business Cycle Research (KOF) in Zurich, which was released on Thursday. It forecast a slowdown in economic growth over the coming two years.

In its autumn report, KOF forecast that Gross Domestic Product would grow by 2.9 per cent in 2000, before slowing to 2.2 per cent in 2001 and 1.5 per cent in 2002.

Inflation was forecast at 1.7 per cent for this year, easing back to 0.8 per cent in 2001/2002, and therefore removing pressure on the Swiss National Bank to raise interest rates.

However, inflation data released on Wednesday had painted a more worrying picture.

Swiss consumer prices rose 2.3 per cent in the year to September, the highest yearly rate seen since December 1993. In August, inflation was running at just 1.3 per cent.

The upturn in prices in September was attributed almost entirely to the increase in oil and fuel costs over the past month. The Federal Statistical Office said the September figure would have been up by only 0.3 per cent, year on year, if oil and fuel prices had been excluded.

On the corporate front, the major news came Wednesday when the Swiss industrial group, SIG, announced it had sold most of its 140-year-old small arms and rifle business to two German private investors. About 100 jobs are at risk in the remainder of the division.

Also in the news was France’s Carrefour, the world’s second largest retailer. It said it was to form a joint venture with Geneva-based Swiss retailer, Maus Frères, to run 10 hypermarkets in Switzerland.

Announcing the deal on Wednesday, Carrefour said it would own 40 per cent of the joint venture, which will begin operating on January 1, 2001.

by Tom O’Brien