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UPDATE 1-Swiss economy generates tepid growth in Q1
2017年6月1日 / 中午11点40分 / 6 个月前

UPDATE 1-Swiss economy generates tepid growth in Q1

* Q1 GDP grows 0.3 pct quarter on quarter

* Retail sales fall 1.2 percent in April

* Purchasing managers index falls in May (Recasts with economist quotes, details)

By John Revill

ZURICH, June 1 (Reuters) - Swiss full-year economic growth forecasts could be revised downwards after a tepid expansion during the first quarter left economists underwhelmed.

Growth perked up only slightly, data showed on Thursday, helped by exports and business investment as the Swiss National Bank battles the strong franc with ultra-loose monetary policy.

Quarter-on-quarter real growth of 0.3 percent surpassed the upwardly revised 0.2 percent in the fourth quarter but lagged the 0.4 percent expansion expected on average in a Reuters poll of five economists. {nZ8N1HD01R]

Switzerland’s export-reliant economy was sent reeling two and half years ago by surge in the value of the franc when the SNB scrapped its cap on the currency against the euro.

The economy ministry said it was disappointed by the speed of the subsequent recovery. This could lead to a revision of its GDP forecasts for 2017, due to be updated on June 20.

“The recovery is well under way, but somewhat more moderate than we hoped,” said Ronald Indergand, the ministry’s head of short-term economic analysis.

“In December, we forecast a rate of 1.6 percent for 2017, assuming the recovery continues, but the GDP growth data has so far been slightly disappointing.”

Exports of goods rose 3.9 percent quarter on quarter and investment in equipment and software gained 1.7 percent, but private consumption slowed sharply to just 0.1 percent from 0.9 percent in the last three months of 2016.

Export growth was broad based, led by chemicals and pharmaceuticals and by the precision tools, watches and jewellery segment, which had its highest growth in six years.

Gross domestic product rose 1.1 percent from the year-ago quarter, up from 0.7 percent in the previous quarter.

“Switzerland’s economy is still lagging behind neighbouring countries, especially Germany, and you have to acknowledge that the growth is still being dampened by the strong franc,” said Alexander Koch, head of macroeconomics at Bank Raiffeisen.

“The strong franc will still weigh on the economy this year and next year.”

The GDP reading comes amid a string of mixed news for the economy, which the SNB has been trying to boost via negative interest rates and currency intervention to rein in the franc.

Retail sales fell 1.2 percent in real terms in April from the year-ago month, while the purchasing managers’ index fell to a seasonally adjusted 55.6 points in May from 57.4 points in April.

SNB Chairman Thomas Jordan on Wednesday again called the franc “significantly overvalued” and said the central bank had ample room to expand its balance sheet if needed.

The SNB, which holds its next policy review on June 15, forecast in March the economy would grow roughly 1.5 percent this year. (Additonal Reporting by Michael Shields; Editing by Toby Chopra)

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