Switzerland’s government lifts 2010 expansion estimation

12-15-2009 09:13

The estimation for the 2010 economic expansion has been lifted by the Swiss government due to the accelerating economic recovery, while it stated that the improvement would continue its slow pace until 2011.
The GDP is forecasted to climb by 0.7% in 2010 en by 2.0% in 2011, according to the State Secretariat for Economic Affairs (SECO).

SECO

“It is expected that the dynamics in the worldwide economy will continue its low level, fact that explains the moderate growth estimations, particularly for next year,” the State Secretariat for Economic Affairs commented.
“There remains a significant pessimistic risk in the economic prospects, given the not cleared issues in the global financial system.”

Swiss GDP

The gross domestic product is forecasted to drop by 1.6% in 2009, according to the State Secretariat for Economic Affairs. This would mean the strongest decline in more than three decades.
In September, the State Secretariat for Economic Affairs had estimated a 0.4% decline in the GDP for 2010 and a 1.7% decrease for this year.

Unemployment – consumer prices

The labor market will continue to be a weak component, as joblessness will increase from the current 4.2% to approximately 5% at the end of next year, while it will decrease gradually in 2011, according to the SECO.
In 2010, consumer prices are estimated to increase by 0.8% and by 0.7% in 2011, after a 0.5% decline this year.

SNB estimations

The new estimations by the Swiss government are comparable with the most recent forecasts by the central bank of Switzerland, which forecasted a 0.5% inflation for 2010 and 0.9% in 2011. The Swiss National Bank (SNB) estimated a 0.5% to 1% economic expansion in 2010, while this year will result in a 1.5% shrink.
The SNB began the extensive process regarding normalizing the monetary policy with its newest quarter-on-quarter estimation last week, slightly weakening its goal to prevent the Swiss Franc to climb further despite the fact that it left the borrowing costs unchanged.