Experts optimistic about economic growth

The Swiss economy is on the up, say experts Keystone

The economy should pick up next year with the first signs of improvement being seen in the second half of 2005, say government and independent experts.

But the economics ministry warned that the global economic situation had showed signs of deteriorating in recent months.

The State Secretariat for Economic Affairs (Seco) said on Friday that it stood by its earlier forecasts of 1.5 per cent growth this year and 1.8 per cent for 2006.

Seco said early indicators showed that growth would be weak during the first half of 2005, but that this would be followed by an upturn.

“If there is progressive growth in our European neighbours, then the Swiss economy should revive in the second half of 2005 and in 2006,” it said in a statement.

However, officials cautioned that while growth was being maintained in the United States, a recovery in the eurozone – where many of Switzerland’s key export partners lie – was looking more doubtful.

This was particularly true of Germany, Switzerland’s most important trading partner, where domestic demand was not picking up.

Seco said future growth in the eurozone, which was sensitive to outside pressures, could be compromised by a weak dollar and higher oil prices.

Exports

Officials were less confident about exports, predicting a 3.2 per cent increase for 2005 compared with 3.9 per cent in January. They also lowered forecasts for 2006, down from 5.0 per cent to 4.2 per cent.

The outlook for imports was also revised down to 3.3 per cent for 2005 (4.2 per cent in January) and 4.7 per cent for 2006 (5.5 per cent in January).

Seco’s prognosis came as the Zurich Institute for Business Cycle Research, better known by its German acronym Kof, confirmed that it, too, could see an end to slow economic growth in Switzerland.

“Over the course of the next few months Gross Domestic Product growth is likely to continue slowing marginally, relative to the figures for the previous year,” said Kof in a statement.

“However, the levelling off of the economic barometer points to an end to the growth slowdown in the autumn of the current year,” it added.

Kof has previously stated that Gross Domestic Product growth for 2005 would be 1.6 per cent, rising to 2.1 per cent next year.

swissinfo with agencies

Key facts

Other forecasts for 2005 and 2006:
Créa Institute Lausanne: 1.6 % and 1.9 %
Basel Economics (BAK) analysis centre: 1.4% and 1.6 %
Zurich Institute for Business Cycle Research: 1.6 % and 2.1 %