March 1, 2018 / 7:10 AM / 19 days ago

Swiss economy gathers pace into 2018

ZURICH, March 1 (Reuters) - Swiss economic growth powered ahead at the end of last year, building steam for a bumper 2018 as a weaker Swiss franc and brisk international demand bolster the export-led economy.

Gross domestic product expanded 0.6 percent quarter on quarter in the final three months of 2017, equating to 1.9 percent year-on-year growth and a 1.0 percent rise for the year as a whole. The economy grew 1.4 percent in 2016.

The GDP data added to a raft of recent upbeat economic news.

The KOF leading indicator, which points to the economy’s expected performance in around six months, rose to an unexpectedly high 108 points in February.

Employment remains solid, with non-farm payrolls up 0.8 percent in the fourth quarter. The jobless rate was just 3 percent in January on a seasonally adjusted basis.

Industrial orders rose by a fifth in the fourth quarter , and the tourism industry is booming again after a slump caused by the franc’s surge against the euro when the Swiss National Bank removed the currency’s cap three years ago.

Even with the economy throttling up, inflation remains subdued. Consumer prices rose 0.7 percent year on year in January, giving the SNB scope to extend its expansive monetary policy that relies on negative interest rates and currency intervention when needed to rein in the franc.

The strategy has paid off as the euro rose from below 1.06 francs a year ago to over 1.15 now. (Reporting by Michael Shields; Editing by John Revill)

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