Economists predict worst recession in 30 years

Leading Swiss economists are expecting the economy to shrink by 1.4 per cent this year – the worst contraction the country has faced since 1975.

The consensus forecast from 24 economists, released by the KOF Swiss Economic Institute on Wednesday, predicted a modest 0.4 per cent recovery in 2010. The poll painted a much bleaker picture than one conducted in December.

Last year, economists were expecting Switzerland to escape negative growth thanks in large part to strong consumer spending and a stable real estate market compared with many other countries.

But forecasters have been forced to lower their expectations and entertain fears of a recession since the turn of the year as industrial production and export figures fell sharply.

The latest predictions also show a sharp rise in the rate of unemployment, from 3.4 per cent last month to 4.3 per cent by the end of the year.