US growth spurs Swiss economy

Massive US growth looks set to shunt Switzerland's economy into positive figures (Federal Railways) Die US-Zahlen sollen als Lokomotive des Schweizer Aufschwungs dienen.

Latest figures confirm that the Swiss economy is expected to grow by 1.5 per cent next year.

The recovery looks more certain thanks to a surge in growth in the United States in the three months up to September – the fastest in 20 years.

Aymo Brunetti, chief economist at the State Secretariat for Economic Affairs (Seco), believes the latest figures out of the US could give a positive impulse to the Swiss economy.

“If the US has a very strong recovery this will pull up European Union exports, which will in turn have a positive effect on the Swiss economy,” said Brunetti.

Seco also said on Friday that the economic policies adopted since the beginning of 2001 were beginning to bear fruit.

It added that the factors restraining growth were disappearing and that the overcapacity of the 1990s had been absorbed.

Seco said it was looking more and more certain that the export-dependent Swiss economy would expand in 2004 – though much would hang on growth in the eurozone and the strength of the Swiss franc.

“It is with growing certainty that one can count on a return to growth in 2004,” said Seco in a statement.

Jobless

Seco’s latest growth forecast repeats the predictions it made in August.

The outlook on inflation (0.6 per cent) and private consumption (one per cent) remains unchanged.

However, its outlook on the unemployment figures is marginally brighter – showing a slight drop from four per cent to 3.9 per cent.

Gross domestic product for this year is still set to fall 0.3 per cent.

Expansion

Seco’s estimates for the Swiss economy were compiled before the latest data on the United States economy was published, showing a surge in the three months to September.

During the third quarter the economy expanded at a rate that, if taken over a year, would amount to 7.2 per cent – more than twice the rate in the previous three months.

The expansion was fuelled by a 6.6 per cent rise in consumer spending, boosted by tax cuts and credits.

Business investment was up 11.1 per cent in the quarter, driven by growth of more than 15 per cent over the previous year in spending on equipment and computer software.

Growth is forecast at about four per cent for the final quarter and into next year.

swissinfo with agencies

In brief

Three reports in the last month have given conflicting views on the future of the Swiss economy:

The State Secretariat for Economic Affairs says the economy will grow by 1.5% next year.

BAK Basel Economics offers a similar forecast with growth of 1.3%.

However, the Centre for Applied Economic Research in Lausanne says it does not foresee an upturn until 2005. It says there will be negative growth and higher unemployment in 2004.